If you are a higher-rate taxpayer, for every €1 you save,you can claim 41 cent back in tax relief. So if you make an overall annual contribution of €1,000, this means it will actually only cost you €590 after tax relief. In addition you may also be able to claim PRSI relief on your contributions to an AVC PRSA.
The Government has set certain limits on the percentage of earnings on which you can claim tax relief.
The limit is related to your income or earnings and to your age. To find out how much tax relief you are entitled to claim, just take a look at the table below:
Age | % of earnings |
Under 30 | 15% |
30-39 | 20% |
40-49 | 25% |
50-54 | 30% |
55-59 | 35% |
60 plus | 40% |
Contributions to your pension scheme and AVC PRSA will be combined when calculating the maximum tax relief. It should be noted that in certain circumstances, to comply with Revenue requirements, your contributions may have to be restricted.
It should also be noted that tax relief is not automatically granted, you must satisfy the Revenue requirements.
An annual earnings cap (which can change each year) is currently €262,382 for 2007 and applies to pension contributions for tax relief purposes.
Legislation restricts the maximum pension fund you may have on retirement. It also restricts the amount of tax-free cash you may take. These limits apply to the aggregate of all of your pension plans. These limits (which may change each year) are €5,165,000 and €1,291,250 respectively for 2007. If your benefit exceeds the limits, the excess amounts will be subject to tax.
It is important to note that the value of the pension investment fund will depend on a number of factors including investment returns, which are not guaranteed. Past performance is not necessarily a reliable guide to future investment returns, which may be higher or lower than assumed. The value of your investment and the sum you originally invested are not guaranteed.
Terms and conditions apply. Your AVC PRSA is governed by a policy document and if there is any conflict between the information on this website and the policy conditions the policy conditions will prevail.
The information about Bank of Ireland Life's products and services is intended only for Irish residents. Bank of Ireland Life's products may only be bought by Irish residents.
New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Financial Regulator and is a member of the Bank of Ireland Group. Bank of Ireland and Bank of Ireland Insurance and Investments Limited are regulated by the Financial Regulator and are tied agents of New Ireland Assurance Company plc.