Maximum AVC

WGT

Registered User
Messages
201
Hi,
Could someone tell me what the maximum allowable AVC Contribution is. Is it 20% of your Gross Income?

WGT
 
Do you mean maximum for ?

Are you already making a basic contribution to an occupational scheme?
 
Hi Clubman,
Yes to both questions.
I mean in relation to PAYE/PRSI relief.
and also
I am contributing 520 a month with a 60/40 split (company contributions Vs Personal Contributions).

WGT
 
OK - the link that I posted should answer the question about how much you can contribute and obtain full tax and PRSI relief on. Basically it depends on your age. Note that the percentage relates to the cumulative total of your occupational and AVC contributions.
 
ClubMan said:
Do you mean maximum for ?

Are you already making a basic contribution to an occupational scheme?
In the supplied link is refers to the percentage as
% of net relevant earnings
. What does this mean? My income is mainly PAYE but I am getting income from share dividends. Can I sum up all my income and derive the % to get my annual pension contributions? Or is it just based on my PAYE income?

Thanks

Mike
 
Investment income is not included in "net relevant earnings" - so PAYE income only
 
Is this worth the bother...

I haven’t quite maxed out my pension contributions for 2005. There’s a short fail of approx €130 to bring it up to my age percentage. Would it be worthwhile to do a AVC for this sum through my broker? Does the broker take a cut of the contributions over and above the annual % for the management fees?

Thanks
S.
 
suzie said:
There’s a short fail of approx €130 to bring it up to my age percentage. Would it be worthwhile to do a AVC for this sum through my broker?
It really depends on your situation. Given that the €130 contribution will probably only actually "cost" you c. €68 in terms of reduced net income after tax/PRSI relief.
Does the broker take a cut of the contributions over and above the annual % for the management fees?
Depends on the broker. And don't forget that some PRSAs charge 5% on each contribution. But, in general, there is no reason that you can't get this down to 0% even if it means changing broker/PRSA.

For what it's worth I tend to prefer maximimising my pension tax relief as far as possible but what's appropriate really depends on the individual's circumstances and targets etc.