Some workings done by someone else on a Reddit forum I came across this morning. Highlights the stark reality of deemed disposal!
I think there are a few problems with that comparison.
1. It compares the after tax value of the ETF with the before tax value of the pension.
2. It overestimates the rate of return and uses quite a long time horizon. If it was to use a more realistic return of say 7%, it would take 45-46 years to reach the levels of returns quoted, and this is just an unrealistic time horizon for most people.
3. There is no account of the lower fees associated with an EFTs as opposed to a typical pension product.
Just to demonstrate the point, let's take look at the other end of the scale in terms of timeline.
Say you invest €1000 in an ETF for 8 years at 7%. The value at the end is €1718 less tax at 41% (€294) is €1424.
Say you invest €1000 in your pension without any tax relief. The value after 8 years at 7% is €1718. You take the first 25% tax free and pay say 50% marginal rate income tax on the rest so you pay €644 tax so the result is €1074.
This is heavily simplified with lots of assumptions. And 8 years is too short a timeline. Even so, I think it is safe to say that the only time that paying into a pension without tax relief is better than other options is if you have a very long investment horizon (e.g. maybe in your 20's or 30's but even then you are probably better using your money getting on the property ladder) and/or if you expect to pay lower rate tax in retirement (and even in this case, it is a marginal call).
With your expected pension fund and your plans for early retirement, you don't meet either of these 2 conditions.