What is a Pension and How Does it Work?

A Pension is a long-term savings plan which helps build up a retirement fund.
Tax Relief is available when you pay money into a Pension Fund.
Money is put in to the fund on a regular basis or in lump sums
(sometimes referred to as Additional Voluntary Contributions or AVC Pension Contributions).
This is then invested with the aim of growing the fund over a period of time so that when you retire you will have another source of regular income that you can rely on for the rest of your life.

What is a Personal Pension or Private Pension?

Personal Pensions or Private Pensions are set up by individuals who do not want to rely solely on the State Pension or feel that the amount paid out by the State will not fully fund the lifestyle they want.

I qualify for a State Pension so do I need a Personal Pension also?

People are living longer and leading more active lives in retirement. Just 53 per cent of the population has a personal pension, which means that 47 per cent (IF they qualify) of the Irish workforce will be depending on a State pension of €235 a week.
Will you be able to have the lifestyle you want off €235 per week?
If you think you should add to this €235 per week – contact IFC Finance today to discuss how to go about setting up a Personal Pension.

The costs of servicing the State Pension is expected to rise from just over €6.5 billion in 2015 to about €8.7 billion in 2026.
Already, to save costs, the qualification age for the State Pension has risen, and it will increase to 67 in 2021 and 68 in 2028. This means that anyone born after 1954 won’t be able to access the State Pension until they are 67, while those born after 1960 will be 68 before they can draw it down.
Now, the economic think tank, ESRI, has just suggested that 70 should be the new age for the State Pension.

Data from Irish Life shows that the average member of an Irish defined contribution scheme is set to retire on a Pension of just 17 per cent of their salary.
“The reality is that some people retiring may be in a very vulnerable position, if they have no pension and ongoing financial commitments,” says Eilis Barry, chief executive of the Free Legal Advice Centre.
This means that the generations yet to retire won’t be making too many opera trips to Italy or six-week winter holidays in Spain. Early-bird dinners and trips to Lidl are more likely.

So, do I really need a Pension? Where will your income come from when you retire?

Your state pension will provide you with a basic level of retirement income; provided you qualify. When planning for retirement you will need to decide whether this is enough to live on in retirement and if not where your additional income will come from. IFC Finance will help you to take control of your retirement planning and make decisions regarding your Pension.

Broadly speaking most peoples’ pensions come from one or more of the following:

1. An Occupational Pension Scheme (also known as a Company Pension Plan)
2. A PRSA (Personal Retirement Savings Account)
3. A Personal Pension Plan
4. The State Pension

It takes a long time to save for retirement and the earlier a person starts to contribute to a Pension, the better.

Company Pension Plan

Company Pension Plans, or occupational pension plans as they are sometimes known, are set up by employers to provide retirement and death benefits for their employees. For more information on Company Pensions please visit our Company Pension Page

Can I have a Personal Pension Plan and a Company Pension Plan Together?

You can have a Personal Pension Plan if you are employed, self-employed or unemployed. You can have this at the same time as having a Company Pension Plan.

Contact us for a Free Initial Discussion about your Pension requirements:
• Tel: 01-6601 016
• E: info@ifcfinance.com