A Pension scheme or as often referred to as a retirement plan, is a way of saving money specifically for your retirement. What makes it different from an ordinary savings plan is that Revenue will assist in the form of tax relief, for which in turn, access to your savings will be restricted.
This restriction takes the form of access to your money, which becomes available when you reach the minimum retirement age.
The maximum pension contributions, in any one year, for which you are entitled to tax relief, is related to your age and is expressed as a percentage of your gross income. The percentage relief limits are:
|Up to 30||15|
|30 to 39||20|
|40 to 49||25|
|50 to 54||30|
|55 to 59||35|
|60 and over||40|
This 40% limit also applies to a sportsman or sportswoman. The overall annual earnings limit for pension contributions is €115,000.
Unless you have a personal fund threshold (PFT), the standard fund threshold is €2,000,000 and the maximum tax-free lump sum on retirement is €200,000.
For more on Pensions see Revenue website
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