If you're a taxpayer there is only one day in the year worth celebrating – 31st October. This is the only day in the year when taxpayers with pension plans get the chance to actually get money back from the government.

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How?

A pension plan comes with very generous tax relief and 31st October 2024 is your chance to maximise the tax relief you enjoy on your pension. Taxpayers can claim full tax relief at their marginal rate on the contributions they make to their pension plan. For a 40% taxpayer this means that every €1,000 they contribute to their pension actually costs just €600 after taking tax relief into account - for a 20% tax payer the real cost is just €800.

For the purposes of tax relief, contributions made to a pension plan are subject to the following limits.

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Age % of Annual Income

Under 30 15%

30 - 39 20%

40 – 49 25%

50 – 54 30%

55 – 59 35%

Over 60 40%

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Tax relief on contributions are subject to maximum contributions based on earnings of €115,000.  

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If however, you have not reached your maximum threshold for pension contributions in a year, you can make a top up contribution to cover the difference for the current and the previous tax year. For example, if you have unused relief’s available in respect of your 2023 tax year, you can make a pension contribution before 31st October 2024 (or before 14th November 2024 if you file on-line) and you will receive tax relief in the current tax year.

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So, if you haven't made the most of the pension tax reliefs open to you, 31st October 2024 is the date to remember. In addition to income tax relief on your pension contributions your pension plan grows tax-free and at retirement you can elect to take part of your fund as a tax-free lump sum.

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Finally, even if you have stopped contributing to your pension plan, it is important that you review the investment strategy regularly. Please contact us at CMCC Financial Solutions if you would like us to review the investment strategy on any paid-up pension plans you may have.