PRSA Pension Policy FAQ's
Frequently Asked Questions
- Why should I consider a PRSA?
- The good news is people are now living longer, but unfortunately the bad news is more and more people have not saved for their retirement. Those retiring at 65 can now expect to live well into their 80s, but with rising care costs and increasing life expectancy, a lot of people face a tough retirement. A PRSA is an easy, flexible and tax efficient way to put money aside for your retirement and can start from just €10 per month.
- Is it possible to stop or pause payments into a PRSA?
- Yes. You can stop and re-start payments at any time and there will be no added charges or penalties.
- Can I pay in a lump sum?
- Of course. We realise that everyone's financial circumstances are unique, so additional lump sums can be added whenever you want.
- Do I have to pay in a regular amount each month?
- No. You can vary the sums that you pay on a monthly basis.
- Will the plan change if I leave work?
- No. When somebody takes out a PRSA they are free to contribute regardless of their employment status. If you leave work and become self-employed or vice versa you can continue to pay in. You can also move your PRSA plan to another provider without any charges and hold a plan with more than a single provider.
- When will I be able to access the benefits?
PRSA plans typically mature whenever the client wants, provided they have reached the age of 60 (although they must be drawn before 75).
You'll also gain access to the benefits if you become seriously ill and the PRSA plan will mature immediately. Seriously ill is defined as somebody who is 'permanently incapable through infirmity of mind or body of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted.'
- Can I contribute if I also have a company plan?
- Yes. In most scenarios the rules of the existing scheme will allow an individual who is a member of a company occupational scheme to contribute to a PRSA AVC arrangement.
- Is there a minimum contribution to a plan?
- Yes, there is. The minimum payment you can make via direct debit or electronic transfer is just €10 and for all other means the minimum contribution is €50.
- Can I claim tax relief?
- Yes you can. A PRSA1 Certificate is issued to everyone who takes out a PRSA product that's not part of an Occupational or Statutory Pension Scheme. As soon as the certificate is received by the Revenue Commissioners your tax credits will be adjusted. If you're a tax relief PRSA contributor who pays their tax under schedule E (PAYE) or schedule D you're eligible to claim income tax relief on your payments up to the limits below.
- Contribution Limits
Age % of net relevant earnings
- Up to 29 Years 15%
- 30 to 39 Years 20%
- 40 to 49 Years 25%
- 50 to 55 years 30%
- 55 to 60 years 35%
- 60 years plus 40%
- Age is defined as the age you are as of 31 December the year in which contributions are made.
- For the above figures an earning cap of €115,000 per annum is applicable.
- For some occupations, such as certain professional sports the 30% limit will apply regardless of age.
- You can back-date to the previous tax year one-off contributions before 31 October.
- If there's a year where contributions exceed the limits, relief can actually be carried over into future years.
- If an individual doesn't receive tax relief because they are not currently working, they are eligible to apply for tax relief to be carried over into future years.
- How can I take out a PRSA plan?
- It's really easy. You can just hit the button below or call our helpful team of advisers on 1890 30 20 20.