Pensions in Ireland vs abroad

S

settlement

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Hi all,

Seems like there are lots of financial disadvantages here in Ireland when it comes to wealth accumulation. High rent, high house prices, high mortgages, high taxation of stocks etc, deemed disposal and so on.

But how do Irish pensions compare to ones abroad? Eg the uk and america? please tell me we have an advantage somewhere
 
There are three advantages to pensions in Ireland vs the UK that I'm aware of. 1) The max pot is €2m here, vs £1m across the water 2), You can access it from age 50 in Ireland, vs age 55 (& rising) in the UK. 3) You get 40% tax relief here on a lower salary, as the tax rates are more punitive (40% rate on earnings over €36k, vs over £50k in the UK)

On the flip side, in the UK you can contribute £40k to your pension p.a. and get tax relief, regardless of age AFAIK. Here it's a factor of your age, and your salary (with a cap of 115k). This all means you have to be in your 60s here before you can contribute a similar amount (€46k p.a.) & get 40% tax relief.

Ireland does not encourage person wealth accumulation, other than through your private residence, and pension. Politicians aren't interested in the topic, because the general public isn't interested / educated in it. As we move from generation defined-benefit/home owner to generation defined-contribution/renter we can only hope that it becomes an issue and we start to see some progressive thinking, but I wouldn't bank on it anytime soon.
 
Last edited:
mojoask said:
Ireland does not encourage person wealth accumulation, other than through your private residence, and pension.
Click to expand...
Ireland's inheritance tax regime is also pretty heavy with the highest and only rate kicking in relatively early.


Fig3_11_2.png

The single 33% rate is also pretty high for children.

Fig3_12.png
 
mojoask said:
There are three advantages to pensions in Ireland vs the UK that I'm aware of. 1) The max pot is €2m here, vs £1m across the water 2), You can access it from age 50 in Ireland, vs age 55 (& rising) in the UK. 3) You get 40% tax relief here on a lower salary, as the tax rates are more punitive (40% rate on earnings over €36k, vs over £50k in the UK)

On the flip side, in the UK you can contribute £40k to your pension p.a. and get tax relief, regardless of age AFAIK. Here it's a factor of your age, and your salary (with a cap of 115k). This all means you have to be in your 60s here before you can contribute a similar amount (€46k p.a.) & get 40% tax relief.

Ireland does not encourage person wealth accumulation, other than through your private residence, and pension. Politicians aren't interested in the topic, because the general public isn't interested / educated in it. As we move from generation defined-benefit/home owner to generation defined-contribution/renter we can only hope that it becomes an issue and we start to see some progressive thinking, but I wouldn't bank on it anytime soon.
Click to expand...
This was a great overview, thanks very much
 
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