Pensions savings

When you’ve got bills and other financial commitments on your plate, finding enough money for your pension isn’t always easy. But it can still be done – and the sooner you act, the more you could benefit.

If you have a defined contribution pension, here are five simple things you can try to get your pension savings moving:

1. Use pay rises as an excuse to save into your pension

If you’re struggling to pay as much as you’d like into your pension, here’s a simple tip to help you save more. Start off by paying in whatever you can afford, then whenever you get a pay rise, redirect a portion of it into your pension.

That way, you won’t get used to spending the money that’s headed to your pension – and you'll still benefit from some of your hard-earned raise going into your bank account.

2. Pay more into your pensions savings  when a regular spend ends

You can try a similar move to the one above whenever a regular expenditure comes to an end. If you pay off a car loan, for instance, you could pay the extra money into your pension plan.

Even small increases like this can make a big difference – especially over the long term. And if you need to reduce your outgoings in future, it’s usually possible to reduce your contributions if you want to.

3. Lump in a lump sum and boost your pension

If you come into some cash, paying a lump sum into your pension is a quick and easy way to give it a boost. And as with other payments into your plan, the government will top it up with tax relief (up to a certain limits).

So if you received a bonus from work and paid €1,000 of it into your pension plan, for example, the government would refund  €200 in tax relief if you’re a 20%  taxpayer – and you could potentially claim back more if you're a higher rate taxpayer. Your tax treatment depends on your individual circumstances and may be subject to change.

4. Maximise any employer pensions contributions

Some employers increase the amount they pay into your pension when you increase your pension contributions too (up to certain limits). So if you put in an extra percent or two of your salary, they might pay in more as well. Ask your boss for details of whether they contribute to your pension plan, and by how much.

5. Maximise pensions tax relief

Availing of tax relief at your marginal rate of tax can be a great advantage of saving in a pension. For example, if you’re paying tax on your salary at the highest rate, then you’re entitled to get a 40% saving on any pension contributions you make. Learn more about tax relief on pensions.

Say you have a salary of €100,000: your maximum annual contribution each year can be:

 

Your Financial Broker – the best place to get your pension in shape

In a recent Brokers Ireland Survey, those who sought pensions advice tended to have much bigger pension pots compared to those that didn’t¹. So, if you're thinking about your pension, it's definitely worth considering speaking to a Financial Broker to make sure you're on the right track.  They’ll help you create a personalised pension plan to help you build a secure retirement and safeguard your hard-earned money.

1. Source: Brokers Ireland Survey July 2023 ‘The value of advice’. The average pension pot of those who sought pensions advice from a financial broker was €130,525 compared to €84,230 for those who didn’t seek advice. 

This article is not intended to give advice or a personal recommendation. If you'd like a personalised recommendation based on your circumstances, you should speak with a financial broker.  You can find a financial broker on brokersireland.ie.

Revenue rules and terms and conditions apply. Remember that tax laws can change over time, so it is important to check revenue.ie for the latest information.