How much Tax can I Save through my Pension?

Pensions offer substantial tax breaks and incentives, including;

  • Tax relief on contributions – You may receive tax relief on payments at a higher rate of income tax, and you may get up to 40% tax relief on your total pension contributions.
  • Tax free growth – Any growth on your investment within your pension fund is tax-free.
  • Tax free lump sum – When you reach your retirement age, you can take up to 25% of your fund as tax-free cash, with a maximum of €200,000. Retirement age can be from age 60.

Your relevant earnings, age, and contributions made all influence the amount of tax relief you can receive. You may only make contributions up to a certain amount, depending on your age and financial situation. The earnings limit for receiving full tax relief is €115,000 per year.

For example, if you are 45 years old and make €80,000 per year, you may receive 40% tax relief on your annual pension contributions up to €20,000. More detail is available in the video below.

*Don’t forget the deadlines! 28th October if filing in person and 14th November if filing online