bestsecretary
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Do you know if there is an option to take a higher pension if you don't take your 150% tax free ,Quick question first for me.
I'm a post 1995 civil servant. Permitted to retire at 65 with a DB pension. I will have 40 years by time I'm 65.
Is there any point and/or benefit in me starting up a private pension. I'm an Assistant Principal grade whose top of the scale will be approximately 78k
Thanks!
So whilst you would get tax relief on such AVCs (perhaps at 40%), the resulting extra pension in retirement would (currently) be taxed at 40% + 4%USC. So not a very tax-effective investment strategy.
The Government aim over the next few years is raise the 20% cut off point to a yearly income of 50000 ,This is surely dependant, on personal
circumstances ? 40% is not neccessarily going to be the tax rate on a potential 39k annual pension, inclusive of state pension.
If their is a spouse, who may have unused Standard Rate Cut off for example, this could potentially be used to reduce, or eliminate the amount normally taxed at 40%.
In the last Budget the Minister for finance set a target of E50000 this will become an election Issue I expect it well be taken on board by all of the main parties from now on,It is a little optimistic i’d say, to think it will happen quickly.
In 2011 SRCO band was €32,800, over 8 years, it has only increased by a total of €1,500 to the 2019 amount of €35,300.
But good point, to avail of any 40% tax relief, while one can.
There is also the possibility, that pension tax relief will become restricted to 30% tax relief, which has been mooted several times.
You may be able to save your tax-free lump sum as AVCs therefore avoiding any lump related reduction to your pension on retirement.Is there any point and/or benefit in me starting up a private pension.
I don't know much about pensions (just mine), that's way I said "may be able". Mine is DB based on 1/60th and I'm saving my lump in AVCs.It’s not the case that you can build up an AVC pot to equal the 3/80this so as to avoid any reduction in the pension.
If the OP is in the standard Civil Service scheme there are two separate benefits:
- a pension based on 1/80th for each year of service, plus
- a lump based on 3/80ths for each year of service.
It’s not the case that you can build up an AVC pot to equal the 3/80this so as to avoid any reduction in the pension.
How many years to retirement, if you were retiring lets say in 2019 you could have built up a avc pension pot of 400000 along with your public servants pension ,I'm still confused, sorry. I'm post 1995, so it's:
- a pension based on 1/80th for each year of service, plus
- a lump based on 3/80ths for each year of service.
is there any point starting a personal pension in light of this?
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