Starting a Pension (2 Salaries and a company Directorship)...Best options?

Some great advice here, so much experience.

In brief:

• 34 year old married man (Wife same age and Public sector so have a PS pension)
• 0 pensions provisons to date (due to varied working background without pension support)
• Currently have 2 salaries (70k + 39k(this one is only for 2 year ending Sep 2023)
• Side income (teaching etc) of 8-10k a year
• Currently a Director of a consulting company 2 years old (22k in the bank) & about 20-30k a year profit (No salary taken out yet).
• House bought and no major plans to change house, job or situation in the future

I now need to get myself set up with a pension plan, and wonder what you smart people would recomend?
A personal PRSA, a directors pension from the company or a combination? Could i make a lump sum payment into a pension based on the compnay profit?

Just looking for some thoughts/recomendations before i approach some providers.

Thanks in advance

As it happens, you can't start a new director's pension for one person at the moment as all the main providers have suspended offering them. (There's another thread about that in this section of Askaboutmoney.) Hopefully that's a temporary situation but hard to know what will happen.

In any event, you seem to have multiple sources of income running at any one time, so it might be preferable to simply have a pension plan that's linked to you and not to a specific company that you run. I'm thinking a Personal Pension or a PRSA. Tax relief on your contributions, up to a limit of 20% of your salaries from all sources. There's a ceiling of €115,000 on the allowable salary. So if your salary from all sources is €100,000 your maximum pension contribution is €20,000. If your salary is €115,000 your maximum pension contribution is €23,000. If your salary is €125,000, your maximum pension contribution is still €23,000 due to the income ceiling.

If your cashflow allows, before mid-November 2022 you could also put a lump sum into a Personal Pension or PRSA and claim the tax relief against 2021 tax year. You'll probably be filing a tax return for 2021 before then so typically you'd make the pension contribution at the same time to reduce the tax bill.

Consult101 said:

Could i make a lump sum payment into a pension based on the compnay profit?

Click to expand...

No - pension contributions are based on your salary, not the company profit.

Regards,

Liam
www.FergA.com