How Pensions Work in Ireland
Learn about the different types of pensions available in Ireland.
Time is Your Ally
Starting early gives your pension more time to grow through compound returns.
Tax Advantages
Pension contributions benefit from tax relief, making saving more efficient.
Financial Security
A pension provides income when you're no longer working.
Types of Pensions
State Pension
A payment from the government when you reach retirement age, based on your PRSI contributions.
Key Points
- Contributory pension requires 520 paid PRSI contributions
- Currently payable from age 66
- Rate depends on your contribution record
- Non-contributory pension is means-tested
Occupational Pension
A pension scheme set up by your employer, often with employer contributions.
Key Points
- Set up and managed by your employer
- Employer may contribute alongside you
- Benefits depend on scheme type
- Can be defined benefit or defined contribution
Personal Pension / PRSA
A pension you arrange yourself with a pension provider.
Key Points
- You choose the provider and contribution level
- Portable if you change jobs
- Flexible contribution options
- Standard and non-standard options available
Tax Relief on Contributions
One of the main advantages of saving into a pension is tax relief. When you contribute to a pension, you get tax relief at your highest rate of income tax, up to certain limits based on your age.
The table shows the maximum percentage of your earnings (up to €115,000) that qualifies for tax relief each year.
Note: These are general limits. Your personal circumstances may differ. This is information only, not tax advice.
Pension Terms Explained
PRSI
Pay Related Social Insurance - contributions that count towards your State Pension entitlement.
PRSA
Personal Retirement Savings Account - a flexible, portable pension product.
Defined Benefit
A pension where your benefit is based on salary and years of service, not investment performance.
Defined Contribution
A pension where your benefit depends on how much is contributed and how investments perform.
ARF
Approved Retirement Fund - a post-retirement investment vehicle for your pension savings.
Annuity
A product that converts your pension pot into a guaranteed income for life.