How to get started

A pension is a long-term savings plan for retirement, funded by a percentage of your salary as you work. You can make regular contributions or top up your retirement fund with a lump sum whenever you want.

This money is then invested by your pension provider through an investment fund with the aim of generating long-term growth until you retire, at which point you can use the pension as an income when you’re no longer working. Note that as with any investment, the value of your pension can go down as well as up and you may get back less than you put in.

If you're employed, your best bet is to check with your employer if you can enrol in a company pension. If not, you can chat to a financial advisor who can help you start a pension plan that suits your needs.

Having a pension in place is really important, so you need to make room for it. Remember that pension contributions can result in income tax savings, so they're cheaper than you think.

Even a small amount like €50 a month is a great start - it all adds up, especially when invested over a long-term plan. Start by creating a budget of your income and expenses and look for areas where you can cut back to make space for pension contributions.

Remember, you can get income tax relief on your pension contributions as well - so they're not as costly as they might seem. 

Tax relief is not guaranteed. You can get tax relief if your income is taxed under Schedule E or Schedule D (case I or II). Learn more.

A pension is a type of investment, but with a few key differences. Firstly, you cannot access the money until retirement age (in most cases). With a regular investment, you are generally able to withdraw your investment fund at any point.

Secondly, pension contributions are subject to income tax relief that investments are not. Not only can your contributions be eligible for income tax relief, but the tax that you pay on income from your pension is much less than the Capital Gains Tax or Deemed Disposal Tax that investments are subject to.

Even though investment savings are a great idea for those who can afford them, getting a pension set up may be a better use of your money if you are saving with retirement in mind.

The best time to start saving for retirement was the moment you started working. The second-best time is right now. It might be difficult to afford pension contributions early in your career, but even a little is much better than nothing.

There are a number of ways to increase your pension contributions depending on the type of pension plan you have.

Increasing regular pension contributions

If you make regular contributions as a percentage of your salary, you can typically increase these through your pension provider or employer payroll.

Additional Voluntary Contributions (AVCs)

Occupational pension schemes usually allow you to make extra contributions, known as AVCs, on top of your regular contributions. You can also use a PRSA AVC to make additional contributions.

Lump sum contributions

If you can afford it, then you can make larger, lump sum contributions to your pension from savings or a bonus.

Review your pension investment strategy

As well as putting in extra money, reviewing your pension contributions is another aspect of trying to maximise the growth of your retirement savings. It’s important to review your pension investment strategy regularly to make sure it aligns with your retirement goals and your risk appetite.

Additional Voluntary Contributions are any extra money you contribute to your company pension scheme. This usually refers to amounts above the minimum required contributions for an Occupational Pension Scheme.

Like regular contributions, you may qualify for income tax relief at your marginal tax rate when you make AVCs. This means that if you pay the 40% rate of income tax, you will receive tax relief of €40 for every €100 in AVCs.

You can either increase your regular payments or make a one-off lump sum contribution to your pension. How much or how little to contribute is up to you.