A private pension is a pension you fund yourself, or that your employer funds for you, separate from the State pension. In Ireland that means one of three things: a PRSA (Personal Retirement Savings Account), a personal pension plan, or a company pension scheme. This page explains how each works, what it costs after tax relief, when you can take the money out and how to choose between them.
One figure before anything else. Tax relief on pension contributions is given at your marginal rate of income tax, 20% or 40% (Revenue). For a higher rate taxpayer, a €500 monthly contribution costs €300 after relief, and the full €500 goes into the fund.
True Wealth is a Central Bank regulated, whole of market broker in Portlaoise, comparing every main Irish provider and advising clients anywhere in Ireland.
What is a private pension in Ireland?
A private pension is any pension you or your employer pay for, as opposed to the State Pension (Contributory), which is paid out of PRSI. It has three tax advantages: income tax relief on contributions, no tax on growth inside the fund, and a tax free lump sum at retirement.
The money is invested in funds run by a life assurance or investment company. You choose, with advice, how it is invested, from cautious to adventurous. The value of your investment may go down as well as up.
“Private pension” and “personal pension” are often used to mean the same thing. Strictly, a personal pension plan is one product, formally a retirement annuity contract; the table below compares it with PRSAs and company schemes.
Do I need a private pension?
The State Pension (Contributory) pays a maximum of €299.30 a week in 2026, about €15,564 a year, and the full rate needs 2,080 paid PRSI contributions, which is 40 years’ worth (gov.ie). It starts at 66. Any income above that, or any retirement before 66, has to come from a pension you fund.
You are likely to need one if you are a PAYE employee with no workplace scheme, self-employed, a company director who wants the company to fund your pension, or a scheme member who wants to save more than it allows. A PRSA is also open to people between jobs, at home or caring for someone, whatever their employment status (Pensions Authority), though tax relief needs earned income.
If you were auto-enrolled into My Future Fund from January 2026, you have a pension, but it may not be enough on its own; the FAQ below explains why.
What types of private pension are there in Ireland?
Which of the three suits you depends on your work, whether an employer will contribute, and how much control you want.
PRSA (Personal Retirement Savings Account)
A PRSA is a contract between you and a PRSA provider, approved by the Pensions Authority and Revenue. Anyone can take one out, an employer can pay into it, and it comes with you when you change jobs. You can stop, start, raise or lower contributions at any time and the provider cannot charge you for changing them (Pensions Authority). A Standard PRSA has capped charges of at most 5% of each contribution and 1% a year of the fund; a non-standard PRSA has no cap but a wider fund range. Our PRSA page compares the two.
Personal pension plan
A personal pension plan, formally a retirement annuity contract (RAC), is an insurance contract you take out yourself, designed for the self-employed and for employees whose employer has no scheme (Citizens Information). Charges are set by the provider and are not capped, and it is not built for employer contributions. Benefits can be taken between 60 and 75, earlier only on ill health or in a small number of listed occupations (Revenue Pensions Manual).
Company pension scheme
A company scheme, or occupational pension, is set up by an employer for its staff, or by a director through their own company. It might be a group scheme, a master trust or an executive pension. Employer contributions are a deductible business expense, are not a benefit in kind for you, and do not count against your own age-related limit (Revenue). If you leave the job, you can take benefits from 50.
Directors get the most from this route because the company funds the pension; our page on pensions for the self-employed and company directors covers executive pensions, master trusts and PRSAs for directors. A small self-administered scheme (SSAP) or self-directed PRSA can also hold direct property, a specialist route covered on our page about buying property through your pension.
PRSA vs personal pension vs company scheme
| PRSA | Personal pension plan | Company pension scheme | |
|---|---|---|---|
| Who can use it | Anyone, whatever your employment status | Self-employed people and employees not in a company scheme | Employees of the sponsoring employer; directors through their own company |
| Tax relief on your own contributions | Age-related limits of 15% to 40% of earnings up to €115,000, at your marginal rate | Same limits and rate | Same limits and rate |
| Employer can pay in | Yes, up to 100% of your salary with no benefit in kind | No, it is not designed for employer contributions | Yes, and employer contributions sit outside your own limit |
| Charges | Standard PRSA capped at 5% of each contribution and 1% a year; non-standard uncapped | Set by the provider, not capped | Set by the scheme and provider, not capped |
| Access age | 60 to 75; from 50 if it holds employer or transfer money and you have left that job; any age on ill health | 60 to 75; earlier only on ill health or in listed occupations | Scheme retirement age of 60 to 70; from 50 if you have left that employment; any age on ill health |
| Lump sum at retirement | 25% of the fund | 25% of the fund | 25% of the fund with the ARF option, or up to 1.5 times final salary with 20 years’ service |
Across all three, the first €200,000 of retirement lump sums in your lifetime is tax free and the next €300,000 is taxed at 20% (Revenue).
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How much tax relief do you get on a private pension?
Relief is given at your marginal rate. In 2026 a single person pays 20% on the first €44,000 and 40% above it (Revenue), so a contribution that comes out of income above €44,000 gets 40% relief and one below that line gets 20%. USC and PRSI are not relieved. The amount you can contribute with relief depends on your age:
| Age | Maximum contribution with tax relief, as a percentage of earnings |
|---|---|
| Under 30 | 15% |
| 30 to 39 | 20% |
| 40 to 49 | 25% |
| 50 to 54 | 30% |
| 55 to 59 | 35% |
| 60 and over | 40% |
Earnings above €115,000 are ignored, so the most anyone can put in with relief is 40% of €115,000, which is €46,000 a year (Revenue). Employer contributions are not counted against these limits.
How the relief reaches you
Through payroll if you contribute by salary deduction; through myAccount (PAYE) or Form 11 (self-assessed) if you pay a PRSA or personal pension plan yourself. Two further rules help. A contribution paid on or before 31 October can be set against the previous tax year if you elect to do so by that date (Revenue Pensions Manual, chapters 21 and 24), so a self-employed person can cut last year’s bill with a payment this October. And anything paid above your age limit carries forward for relief in later years.
How much should I pay into a private pension?
Two ways to arrive at a figure. Start from the limit: the age table is a ceiling, not a target, but a fair guide to what people at each age can put away. Or start from the retirement you want and work back from the income you would like at 66 on top of the State pension. Our pension calculator does this with your own numbers, and an advisor adjusts it for charges, employer contributions and existing pensions.
The figure is not fixed. A PRSA lets you vary contributions at any time, and most company schemes take Additional Voluntary Contributions (AVCs) on top; our AVC page explains how.
What does a private pension cost after tax relief?
Two examples using the 2026 rate bands and the Revenue age limits. Growth figures assume 5% a year before charges, applied monthly, contributions unchanged to 66, and no allowance for inflation. Charges and tax on the way out would reduce them. The value of your investment may go down as well as up.
Sarah, 42, PAYE employee on €60,000 with no company scheme
Sarah opens a PRSA at €500 a month.
- Annual contribution: €500 × 12 = €6,000, which is 10% of her salary.
- Her age limit (40 to 49) is 25% × €60,000 = €15,000, so she has room to increase it.
- Her income above the €44,000 band is €60,000 less €44,000 = €16,000, so the whole €6,000 sits in the 40% band.
- Tax relief: €6,000 × 40% = €2,400 a year.
- Net cost: €6,000 less €2,400 = €3,600 a year, or €300 a month.
- Into the fund: the full €6,000 a year.
If Sarah keeps €500 a month going to 66, she pays in €144,000 over 24 years. At 5% a year before charges the fund would be about €277,000 at 66, of which about €133,000 is growth.
David, 52, sole trader with profits of €90,000
David pays €1,500 a month into a personal pension plan.
- Annual contribution: €1,500 × 12 = €18,000, which is 20% of his profits.
- His age limit (50 to 54) is 30% × €90,000 = €27,000.
- His income above €44,000 is €46,000, so the whole contribution gets 40% relief.
- Tax relief: €18,000 × 40% = €7,200 a year.
- Net cost: €18,000 less €7,200 = €10,800 a year, or €900 a month.
David paid the same €18,000 last year, leaving €9,000 of that year’s €27,000 limit unused. In October he pays a €9,000 lump sum and elects to have it relieved against last year before he files: €9,000 × 40% = €3,600 off last year’s bill, so the €9,000 costs him €5,400.
Over 14 years to 66, €1,500 a month adds up to €252,000 paid in. At 5% a year before charges the fund would be about €364,000, plus about €18,000 from the lump sum.
What is the best private pension in Ireland?
There is no single best private pension in Ireland. The plan that suits a 30-year-old whose employer will match contributions is wrong for a 55-year-old sole trader, and both are wrong for a director whose company will fund €40,000 a year.
What we compare on your behalf: charges (allocation rate, annual management charge and any policy fee, with the Standard PRSA’s 95% allocation and 1% a year as the benchmark), fund range and risk levels, whether a lifestyle option moves you to lower risk near retirement, whether you can stop, restart or transfer out without a penalty, and whether an employer can pay in. Because we are whole of market, every main Irish provider goes side by side, and you see the comparison before you decide.
What are the charges on a private pension?
Two charges matter most. The contribution charge is a percentage taken from each payment before it is invested; on a Standard PRSA it cannot exceed 5% (Pensions Authority). The annual management charge (AMC) is a percentage of the whole fund taken every year; capped at 1% on a Standard PRSA, not capped elsewhere. Some specialist funds and older plans add fund charges or a monthly policy fee.
Charges compound the same way growth does. Take €300 a month from 35 to 66 at 5% a year before charges: about €266,000 at 66. Take 1% a year off for charges and the same contributions come to about €220,000, a difference of about €46,000 (our arithmetic, monthly compounding, no inflation adjustment). Every plan we recommend has its charges set out in writing before you sign.
When can I access a private pension?
- PRSA: from 60. From 50 if the PRSA holds employer contributions or a transfer from a company scheme and you have left that job. Any age on ill health. At 75 it vests and is treated like an ARF for minimum drawdowns.
- Personal pension plan: between 60 and 75. Earlier only on ill health or in listed occupations.
- Company scheme: the scheme’s retirement age, between 60 and 70. From 50 if you have left that employment. Any age on ill health.
At retirement you can take 25% of the fund as a lump sum. The first €200,000 is tax free, the next €300,000 is taxed at 20%, and anything above €500,000 at your marginal rate (Revenue). The balance buys an annuity (an income for life) or goes into an Approved Retirement Fund (ARF) that stays invested while you draw from it. An ARF or vested PRSA has a minimum drawdown of 4% a year from the year you turn 61 and 5% from 71 (Revenue).
Cashing in a private pension before 50 is not possible in Ireland outside ill health; what you can do is pause contributions. The routes to retiring from 50 are on our pension review page.
How do I set up a private pension?
- Find out what you already have. We can trace a pension from a previous job for you.
- Tell us about your work and income: PAYE or self-employed, salary or profits, and whether an employer would contribute. That decides PRSA, personal pension plan or company scheme.
- Agree the contribution, working back from the retirement you want to the net cost after relief.
- Compare providers on charges, funds and terms, side by side.
- Sign and set up the payments: direct debit or salary deduction, plus photo ID, proof of address and your PPS number. We deal with the tax relief through your payroll or Revenue.
- Review it at least once a year, raising contributions as your earnings rise.
A UK pension can sometimes be brought into an Irish scheme; our page on transferring a UK pension to Ireland sets out the rules. If you have never had a pension, our start a pension guide takes you through the first steps.
