# Cashing in Pension



## jambo.ie (28 Apr 2008)

Hi,

I started a pension in december but have since decided to leave my job and go to Oz for a year or two. I've contributed over €600 to my pension and would like to use that cash to fund part of my trip. What kind of penalties would I incur? I could of course leave the money there until I come back and then take up the pension again. Our fund is by Irish life and is managed By Aon Consulting.

J.


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## shaking (28 Apr 2008)

once you have been in the scheme for less than 2 years you can get a refund for your contributions, less tax. Irish Life will issue leaving service options to you when you leave your job


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## jambo.ie (28 Apr 2008)

So no penalties from Irish Life? Sweet.

Also, I will only be working in Ireland 5.5 months this year. This means that my tax liability will be vastly reduced. Will this be taken into account?

Thanks,

J.


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## ClubMan (28 Apr 2008)

However remember that you will only get back your personal/_AVC _contributions (and not also employer contributions) net of 20% income tax and you "lose" the vesting time to date within that scheme or in any other one to which you might eventually transfer. There may be other pros and cons.

Even in the limited circumstances in which you can cash in a pension early you should understand all of the pros and cons before actually doing so. These issues are probably covered in a few existing threads which you should search out.


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## rmelly (28 Apr 2008)

ClubMan said:


> However remember that you will only get back your personal/_AVC _contributions (and not also employer contributions) net of 20% income tax.
> 
> Even in the limited circumstances in which you can cash in a pension early you should understand all of the pros and cons before actually doing so. These issues are probably covered in a few existing threads which you should search out.


 
Why 20%? 

OP, what is the fee structure? Have you checked to see what the actual value is, rather than what you put in, given stock market recent volatility?


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## ClubMan (28 Apr 2008)

rmelly said:


> Why 20%?


Standard rate of tax.


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## jambo.ie (28 Apr 2008)

ClubMan said:


> Standard rate of tax.


Even if I have no tax liability in 2008? 

I'm not sure how much the value of the pension has gone down since December. I'm presuming it's a bit. I was aware that I lose the employer contributions. I will search out the other threads.


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## ClubMan (28 Apr 2008)

jambo.ie said:


> Even if I have no tax liability in 2008?


Oh - not sure about that.


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## Conan (28 Apr 2008)

All personal refunds are taxed at standard rate. You got tax relief on the way in, so you pay some tax on the way out.

Conan


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## jambo.ie (28 Apr 2008)

Conan said:


> All personal refunds are taxed at standard rate. You got tax relief on the way in, so you pay some tax on the way out.
> 
> Conan


I'll be earning less than €18,300 total in Ireland in 2008 so effectively I didn't get any relief on contributions in 2008 because I have no tax liability. I'll have to look at my options after I hand my notice in and speak to AON/Irish Life. Thanks for the help lads/lassies.


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## shaking (28 Apr 2008)

You'll still be hit for 20% tax on the refund as Conan says you would have got relief on the way in so they take it back from you on the way out


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