Pensions vs. other forms of investment

[Arklow14]

CharlieMac, this is my exact thinking, and I have been struggling with what to do

 

[conor_mc]

Since I'm only starting with AVCs my idea was to put a lump sum in to the same pot I use for AVCs. I wouldn't try to carry forward tax relief on that lump sum to future years since I will be maxing out AVCs every year until I retire anyway.

Apologies, I misunderstood the point you were making. I thought you were looking to carry forward the tax relief.

 

[ClubMan]

To get your hands on that, you'll have to pay tax

Likely only on 75% of it if you factor in the tax free lump sum?

 

[CharlieMac]

@Fortune That's a great explanation, cheers. I think I've finally got it now!

Part of my problem is my perception of the risk/reward and hassle of investing inside a pension vs outside one. My impression, maybe wrong or not 100% correct, is that investing in a pension comes with less hassle and risk than a basket of individually held shares. I'm not yet willing to consider ETFs.. hassle and high taxes.

If my investments outside a pension did well then I can tolerate some hassle (tax returns etc) but in Ireland we don't have access to the same diversified investments on the same low cost terms outside a pension fund as we do inside that aren't taxed prohibitively.

Hopefully some day low cost index funds held outside a pension will be taxed at CGT rates.