pensions explained
irish pensions,in plain english.
new to pensions, or new to ireland? start here. what the state gives you, what your job adds, what you can do yourself — and the rules, explained simply.
66
state pension age
€299.30
full state pension a week (2026)
40%
most tax relief on what you pay in
€200,000
tax-free at retirement (lifetime)
the three parts
most people's retirement income in ireland comes from three places.
the state pension
A weekly payment from the government from age 66. How much you get depends on the PRSI you've paid over your working life.
02workplace pensions
Savings through your job: your employer's scheme, or auto-enrolment (MyFutureFund) if you don't have one. Your employer pays in too.
03your own pension
A PRSA or personal pension you set up yourself. Useful if you're self-employed or want to save more. You get tax relief on what you pay in.
The State Pension on its own is a safety net, not a full income: in 2026 the full rate is €299.30 a week, about €15,564 a year. Most people need a workplace or personal pension as well to keep a similar standard of living after they stop working.
the state pension
From age 66, the government pays a weekly pension. There are two kinds: one based on the PRSI you've paid, and one based on your income if you don't have enough PRSI.
state pension (contributory)
This is the main State Pension. It isn't means-tested — what you earn or own doesn't matter — but it is counted as taxable income.
- You can get it from age 66.
- The full rate is €299.30 a week in 2026, rising to €309.30 from January 2027 (Budget 2027).
- To qualify at all you need at least 520 paid PRSI contributions — about 10 years of work.
- For the full rate you need 2,080 contributions in total — about 40 years. Credits for time spent unemployed, ill or caring for someone count towards this. Fewer than 2,080 means a reduced rate.
- The government is moving to this “total contributions” method gradually. If you reach 66 in 2026, 80% of your rate is still worked out the older “yearly average” way and 20% the new way.
- You can choose to start it later, up to age 70, for a higher weekly rate — for example €313.40 a week if you start at 67 in 2026.
state pension (non-contributory)
For people aged 66 or over who don't have enough PRSI for the contributory pension, or only get a small amount from it. It is means-tested: the government looks at your income and property (not including your home).
- Up to €288 a week aged 66–79 and €298 aged 80 or over in 2026; €298 and €308 from January 2027.
- The first €30 a week of your means is ignored. After that, the pension is reduced as your means go up.
- If you or your partner work, €200 a week of each person's earnings is ignored.
what this means for you
official sources: State Pension (Contributory) ↗ · deferring it ↗ · State Pension (Non-Contributory) ↗ · 2026 rates ↗ · Budget 2027 changes ↗
auto-enrolment
Since 1 January 2026, employees who don't have a pension through work are put into one automatically. It's called MyFutureFund. You, your employer and the State all pay in.
- You're enrolled if you're aged 23 to 60, earn more than €20,000 a year, and don't already pay into a pension through your payroll.
- Contributions are a percentage of your gross pay, on earnings up to €80,000 a year.
- Your employer must match what you pay in, and the State adds €1 for every €3 you pay — instead of tax relief.
- The amounts are fixed: you can't pay more or less than the set rate. They rise every three years:
| years | you pay | employer pays | state adds | total |
|---|---|---|---|---|
| 2026–2028 | 1.5% | 1.5% | 0.5% | 3.5% |
| 2029–2031 | 3% | 3% | 1% | 7% |
| 2032–2034 | 4.5% | 4.5% | 1.5% | 10.5% |
| 2035 on | 6% | 6% | 2% | 14% |
% of your gross pay.
what this means for you
official sources: auto-enrolment explained ↗ · MyFutureFund ↗
workplace pensions
Many employers run their own pension scheme (an occupational pension). Your employer usually pays in as well, which makes it one of the best-value ways to save.
There are two main types:
- Defined benefit (DB) — promises a set pension, usually based on your salary and how long you worked there. Common in the public sector and older companies.
- Defined contribution (DC) — money goes into your own pot and is invested. What you get depends on how much was paid in and how the investments did. Most new schemes are DC.
- Extra payments (AVCs) — you can usually pay in more on top of the normal amount, with tax relief. If your scheme doesn't allow this, your employer must offer a PRSA you can use instead.
- Leaving your job — the pension stays yours. If you leave within two years, you may instead get back your own contributions, less tax.
what this means for you
official sources: occupational pensions ↗ · AVCs ↗ · what are my pension options? ↗
your own pension
If you're self-employed, between jobs, or want to save more, you can set up a pension yourself. You pick the provider and the funds, and you get tax relief on what you pay in.
- PRSA (Personal Retirement Savings Account) — a pension you own that moves with you from job to job. A “standard” PRSA has capped charges and simple investment choices.
- Personal pension (Retirement Annuity Contract) — mainly for the self-employed and people without a workplace scheme.
- Charges matter a lot over decades. Use the fund explorer and compare to see returns and risk, and the calculator to see what charges cost you.
official sources: PRSAs (Revenue) ↗ · introduction to pensions ↗
tax relief
When you pay into a pension, you get back the income tax you'd have paid on that money. It's the main reason pensions are such good value.
Relief is at your highest tax rate: 20% or 40%. So if you pay the higher rate, putting €100 into your pension costs you only about €60 — the other €40 is tax you don't pay.
There's a limit to how much gets relief each year. It depends on your age, as a share of your earnings, and earnings above €115,000 don't count:
| your age | % of earnings | most relief at €115,000 |
|---|---|---|
| Under 30 | 15% | €17,250 |
| 30 to 39 | 20% | €23,000 |
| 40 to 49 | 25% | €28,750 |
| 50 to 54 | 30% | €34,500 |
| 55 to 59 | 35% | €40,250 |
| 60 and over | 40% | €46,000 |
Your employer's contributions don't count towards your limit. Auto-enrolment doesn't get tax relief — the State top-up replaces it.
what this means for you
official sources: tax relief limits (Revenue) ↗ · tax relief on pensions ↗
when you retire
Private and workplace pensions usually pay out from age 60, or earlier from 50 if you retire, or if you have to stop working through serious illness. Workplace schemes have their own retirement age, often 60 to 70.
1. a lump sum
Most people take part of their pension as a lump sum: usually up to 25% of the pot, or for workplace schemes up to 1.5 times final salary after 20 years' service.
| lump sum (over your lifetime) | tax |
|---|---|
| First €200,000 | tax-free |
| €200,000 to €500,000 | 20% |
| Above €500,000 | your normal income tax rate |
2. an income from the rest
- An annuity — you hand your pot to an insurer for a guaranteed income for life. Certain, but you can't change your mind later.
- An ARF (Approved Retirement Fund) — your money stays invested and you take out what you need. Flexible, but it can go down, and it can run out.
- From 60, Revenue treats part of an ARF as withdrawn each year, and taxes it as income, even if you leave it in:
| arf | taxed as taken out each year |
|---|---|
| Fund up to €2m, aged 60–69 | 4% |
| Fund up to €2m, aged 70 or over all year | 5% |
| Fund over €2m | 6% |
- A PRSA must start paying out by age 75.
- There's a lifetime limit on pension savings with full tax benefits — the Standard Fund Threshold: €2,200,000 in 2026, €2,400,000 in 2027. Only very large pensions reach it.
what this means for you
official sources: lump sums (Revenue) ↗ · ARFs (Revenue) ↗ · SFT (Revenue) ↗ · pension options (Pensions Authority) ↗
your first steps
You don't need to understand everything at once. These five steps cover most of it.
- 01Check your PRSI record on MyWelfare ↗ — it decides your State Pension.
- 02Ask your employer whether they offer a pension and how much they pay in. If not, you'll be in MyFutureFund.
- 03Find your pension statements and add them to your portfolio to see what they could be worth.
- 04Look at the charges. A 1% difference a year can cost tens of thousands of euro over a working life.
- 05Use the calculator to see how much more you'd need to pay in, and how much tax relief you'd get.
glossary
The words you'll see on pension statements, in plain terms.
- PRSI
- Pay Related Social Insurance — taken from your wages. Your PRSI record decides your State Pension.
- Contribution
- One week of PRSI paid. 52 a year if you work all year.
- Credits
- PRSI weeks the State gives you when you can't work, e.g. while unemployed, ill or caring. They count towards your State Pension.
- Defined benefit (DB)
- A workplace pension that promises a set income, usually based on your salary and years of service.
- Defined contribution (DC)
- A pension pot built from what's paid in plus investment growth. What you get depends on how the pot does.
- AVC
- Additional voluntary contribution — extra money you pay into your workplace pension on top of the normal amount.
- PRSA
- Personal Retirement Savings Account — a pension you own and can bring from job to job.
- AMC
- Annual management charge — the yearly fee taken from your pension pot, as a % of its value.
- Annuity
- A guaranteed income for life, bought from an insurer with your pension pot.
- ARF
- Approved Retirement Fund — your pot stays invested after you retire and you take money out as you need it.
- Vesting
- The point at which you start drawing benefits from a pension.
- SFT
- Standard Fund Threshold — the most you can build up in pensions with full tax benefits.
where to get help
These services are free and independent.
- Citizens Information ↗ — plain-English guides to every payment and scheme, plus a free phone and drop-in service.
- MyWelfare ↗ — your PRSI record and applying for the State Pension.
- The Pensions Authority ↗ — guides on workplace pensions and PRSAs.
- Revenue ↗ — tax relief and how pensions are taxed.
- MyFutureFund ↗ — auto-enrolment.
- Financial Services and Pensions Ombudsman ↗ — if you have a complaint about a pension provider.
official links
check it yourself.
Every rule on this page comes from these official government pages. They're updated whenever the rules change, so check them for the latest figures — especially after each Budget in October.
State Pension
- State Pension (Contributory)Who qualifies, PRSI needed, how the rate is worked out.Citizens Information
- State Pension (Contributory) serviceThe Department of Social Protection's page, and how to apply.gov.ie
- Deferring your State PensionStarting it later, up to 70, for a higher weekly rate.Citizens Information
- State Pension (Non-Contributory)The means-tested pension and how the means test works.Citizens Information
- Social welfare rates 2026Every weekly payment rate for this year.Citizens Information
- Social welfare changes in Budget 2027What changes from January 2027.Citizens Information
Auto-enrolment
Workplace and personal pensions
- Introduction to pensionsA short overview of every type of pension.Citizens Information
- Occupational pensionsPensions through your job: DB, DC and your rights.Citizens Information
- What are my pension options?Your choices at retirement, explained by the regulator.Pensions Authority
- Additional voluntary contributions (AVCs)Paying extra into a workplace pension.Pensions Authority
- PRSAsPersonal Retirement Savings Accounts and their tax rules.Revenue
Tax and retirement
- Tax relief limits on pension contributionsThe age-related limits and the €115,000 earnings cap.Revenue
- Tax relief on pensionsHow relief works, in plain English.Citizens Information
- Taxation of retirement lump sumsThe €200,000 tax-free limit and the 20% band.Revenue
- ARFs and imputed distributionsHow Approved Retirement Funds are taxed each year.Revenue
- Standard Fund Threshold (Form 787S)The lifetime limit on tax-favoured pension savings.Revenue
Your records and help
- MyWelfareCheck your PRSI record and apply for the State Pension.mywelfare.ie
- Citizens InformationFree, independent information, by phone or in person.citizensinformation.ie
- The Pensions AuthorityThe pensions regulator: guides and consumer information.pensionsauthority.ie
- Financial Services and Pensions OmbudsmanMake a complaint about a pension provider, free.fspo.ie
Figures checked against Citizens Information, gov.ie, Revenue, the Pensions Authority and MyFutureFund in November 2026. Rates change every Budget; follow the links for the latest. This is a general guide, not advice on your own situation.