10 Advantages of Pensions

1. Affording not to work: Obviously, the principle advantage of having a pension is to accumulate enough capital, so that when the time comes for your retirement, you have the financial security to continue living in the fashion to which you have become accustomed during your years in employment.

2. Irish personal pension contributions have tax relief benefits, set out by the government, which are relative to the age of the contributor; the greater the age of the contributor, the greater the amount of their salary they can contribute to the pension and receive tax relief on it.

3. When you contribute into your personal pension plan, you can receive tax relief benefits at your marginal income tax rate. Example: if you pay income tax at 41%, the tax man will rebate to you €410 for every €1,000 that you pay into your pension fund.

4. The tax man does not charge tax on any growth earned by your pension fund. This means that your pension fund growth will be higher over the long term as all the growth made remains in the policy.

5. It is possible for you to take up to a quarter of your personal pension fund that you will have at retirement, as a tax-free lump sum. This means that even though you received tax relief on money you invested and tax free growth, you can receive part of your fund back tax-free.

6. No upper limit: with personal pensions, you are able to invest as much as you wish, although there is a limit to the amount on which you can claim tax relief and this is relevant to the policy-holders age.

7. Pension funds grow over time: the longer you make contributions, the greater the potential growth of the fund over time.

8. Peace of mind: if the worst happens and your dependents are left to cope without you, then your pension can provide a source of income for those you leave behind- although this option is subject to the type of policy purchased.

9. A greater return than your savings: because of the tax relief benefits on your contributions, as well as on your accumulated funds, a pension will usually offer you a better return than other types of saving.

10. Freedom of choice: with many pension policies you are able to direct the investment of your contributions into different funds, giving you some flexibility in how your contributions are invested and therefore how they grow.