Why Pensions Matter

Pension Season refers to the weeks leading up to the self-assessment tax return deadline. During this time, you can make a pension contribution for the previous tax year, allowing you to reduce your tax bill while boosting your long-term savings.

In practical terms, this means that if you make a qualifying contribution now, you can offset it against your 2024 income, effectively getting the Revenue to help fund your retirement.

Tax relief is available at your marginal rate, meaning higher-rate taxpayers can get up to 40% relief on contributions. For example, a €1,000 pension contribution might only “cost” you €600 after tax relief, a powerful incentive to make the most of this annual opportunity.

The Tax Advantages at a Glance

The tax treatment of pensions is widely regarded as one of the most generous supports available:

1. Tax Relief on Contributions – At your marginal income tax rate (20% or 40%).
2. Tax-Free Growth – Funds grow free of income tax and capital gains tax while invested.
3. Tax-Free Lump Sum at Retirement – Up to 25% of your fund (subject to limits) can usually be taken tax-free.

For company directors and business owners, pensions are even more attractive. Employer contributions are deductible as a business expense, reducing corporation tax, and can often exceed the limits that apply to personal contributions.

It’s a win-win - good for the business and excellent for the individual’s long-term financial security.

Auto Enrolment Is Coming – Be Ready

One of the biggest upcoming developments in Irish pensions is the introduction of Auto Enrolment, now confirmed to begin its rollout in 2025.

This long-awaited system will automatically enrol employees who are not already part of a pension scheme into a new national plan. Both employers and employees will make contributions, with additional top-ups from the State.

While the aim is to improve retirement outcomes for workers, employers need to start planning now.

If you don’t already have a pension scheme in place, you’ll be required to register your eligible employees under the Auto Enrolment system. This will have specific contribution rates, administrative requirements, and limited flexibility compared to private occupational schemes.

As a business owner, it’s worth considering whether it makes more sense to establish your own pension arrangement now. Doing so allows you to:

• Retain control over contribution levels and scheme design
• Choose from a broader range of investment options
• Provide a more tailored benefit for your employees
• Avoid being defaulted into a State-managed system

Helping employers set up and manage pension schemes is a core part of what we do. We can advise you on whether your current arrangements are compliant, competitive, and suitable or, if needed, design a solution that works for your business and your team.

For Individuals – Don’t Leave It Too Late

For employees and the self-employed, pension planning remains one of the smartest financial decisions you can make. Even modest, regular contributions can grow substantially over time, thanks to the power of compound growth and ongoing tax relief.

If you haven’t reviewed your pension in the past year, now is the perfect time to check:

• Are you contributing enough to meet your retirement goals?
• Are your funds invested appropriately for your age and risk tolerance?
• Could you make an additional contribution before the deadline to reduce your 2024 tax bill?

A short review now could make a big difference later.

The Bottom Line

Whether you’re an employer preparing for Auto Enrolment, a company director maximising tax-efficient contributions, or an individual looking to make the most of pension season, the key message is simple - take action now.

The combination of generous tax incentives, flexible options, and the upcoming Auto Enrolment framework make this an ideal time to review your retirement strategy.

We’re here to help you navigate the choices, compare providers, and ensure you’re getting the best value and performance from your pension plan.

If you’d like to review your pension or discuss setting up a scheme for your business, get in touch. Now really is the season for pensions.

Why a Review Matters

If your protection was arranged through a bank when you drew down your mortgage, there’s a good chance that it was a one-size-fits-all solution, focused mainly on satisfying the lender’s requirements, rather than tailoring cover around you and your family’s long-term financial security.

While these policies can serve their purpose, they often aren’t the most competitive in terms of pricing, nor the most comprehensive when it comes to benefits or flexibility.

As intermediaries, we have access to all the leading life companies in Ireland, allowing us to compare plans across the market. This gives our clients three key advantages:

• Competitive pricing – ensuring you don’t overpay for the level of protection you need.
• Better coverage – choosing benefits that reflect your real priorities, not just your mortgage obligations.
• Access to impartial advice

Different Plans for Different Needs

Protection is not a single product, but a suite of options designed to safeguard you and your loved ones in different ways. Here’s a brief overview of the main types:

1. Term Life Cover
This is the most common form of protection. Ordinarily it is a policy that pays out a lump sum if you die during a specified term. It can provide vital financial support for your family, helping them cover mortgage repayments, household bills, education costs, or other commitments.

2. Specified Serious Illness Cover
A serious illness diagnosis can have a major financial impact. This cover pays a lump sum if you are diagnosed with one of the specified illnesses (such as cancer, heart attack, or stroke). The payment can be used however you wish. For example to replace lost income, pay for medical treatment, or simply provide breathing room during a difficult time.

3. Income Protection
Often overlooked, this cover can be a financial lifeline. If you are unable to work due to illness or injury, Income Protection replaces a portion of your income until you return to work or reach retirement age. It’s particularly valuable for the self-employed or anyone without strong sick-pay benefits.

4. Section 72 – Guaranteed Whole of Life
For those thinking ahead to estate planning, a Section 72 policy can be a tax-efficient way to provide for potential inheritance tax liabilities. The proceeds of the policy can be used by your beneficiaries to settle tax due on an inheritance, ensuring that assets such as family homes or investments don’t need to be sold to meet the bill.

When to Review Your Cover

Major life events are natural points to revisit your protection:

• Taking on a new mortgage or loan
• Marriage or civil partnership
• The arrival of children or grandchildren
• A change in employment or income
• Setting up a business or going self-employed
• Planning for retirement or passing on wealth

Even if none of these have happened recently, it’s still worth a periodic review to ensure your cover remains cost-effective and appropriate.

A Strong Financial Plan Starts with Protection

Protection is the foundation of any solid financial plan. While thinking about investments or pensions, it’s also essential to ensure that your income and family’s future are secure if the unexpected happens.

Our role is to help you build a robust, flexible protection strategy - one that evolves with your life and takes advantage of the best options on the market.

If it’s been a few years since you last reviewed your cover, now is the perfect time to make sure we truly have you covered.

The Real Cost of Education

Education in Ireland is often described as “free,” but the reality can be quite different. Between books, uniforms, fees, accommodation, and day-to-day expenses, the bills quickly add up.

At secondary school level, parents typically spend around €2,900 per year on costs such as books, uniforms, extracurricular activities, voluntary contributions, transport, lunches, and grinds. This is significantly higher than some traditional estimates, with total costs over six years potentially reaching about €17,500 per child. These costs include grinds (~€825), lunches (~€429), and transport (~€237), all major contributors to the total annual expense.

However, the real financial challenge often begins with third-level education.

According to recent studies:

• A student living at home costs an average of approximately €6,100 per year.
• A student living away from home can cost between €14,000 and €14,500 per year, depending heavily on accommodation and location.

For a four-year degree, this means you could be facing total costs of roughly €24,500 to €58,000 per child and that’s before factoring in inflation or potential postgraduate study.

Government grants and scholarship programs are available and can help reduce costs, so it’s worth exploring these options as part of your planning.

Why Starting Early Matters

Being proactive is the key. Starting a savings plan early allows you to spread the cost over time and take advantage of compound growth. In other words, your money earns a return, and then your returns start earning returns.

Leaving it too late often means having to draw on income or borrow at a time when other financial pressures, such as mortgage payments or retirement planning, are already in play.

The message is simple: a small, regular contribution today can make a big difference tomorrow.

The Limitations of Traditional Savings Accounts

While it’s always wise to have some funds set aside in an accessible savings account, relying solely on traditional deposits is rarely the most effective way to grow education savings.

Interest rates on deposits remain low, and when inflation (currently about 2.2% annually for education costs) is taken into account, the real return can be negligible or even negative.

Let’s look at an example:

If you save €250 per month for 15 years, you’ll contribute a total of €45,000.

• At an average 2% annual return, your savings could grow to around €52,000.
• At an average 4% annual return, your fund could reach roughly €61,000.

That’s a difference of €9,000, achieved simply through a higher long-term growth rate and 4% is not something typically achievable at present through standard bank deposits.

A Smarter Way to Save – Regular Savings Plans

A Regular Savings Plan with a leading life company offers a flexible and effective alternative. These plans allow you to invest a regular monthly amount (often as low as €100) into a range of professionally managed investment funds tailored to your timeframe, goals, and attitude to risk.

You can increase or decrease contributions as circumstances change, and access a wide selection of funds from cautious, low-risk options to more growth-oriented investments.

Over time, this approach allows your savings to work harder, with the potential for higher long-term returns compared to deposit-based saving.

Crucially, you retain flexibility: you can pause contributions, make lump-sum top-ups (note minimum lump sums may apply), or adjust the plan as your needs evolve.

The Importance of Regular Reviews

Once your plan is in place, it’s important not to set it and forget it. Regular reviews ensure your savings remain on track, reflect changes in your circumstances, and take account of market conditions or new opportunities.

We recommend reviewing your plan at least once a year to make sure it continues to meet your objectives.

Professional Guidance Makes the Difference

When it comes to investing for something as important as your child’s education, good financial advice matters. As an independent broker, we work with all the leading providers, ensuring that your plan is not only competitive, but also aligned with your personal goals and comfort with risk.

We’ll help you understand your options, structure a plan that fits your budget, and keep it under regular review as your family’s needs evolve.

In Summary

The cost of education is significant but entirely manageable with the right planning. By starting early, choosing the right savings vehicle, and reviewing it regularly, you can turn what might otherwise be a financial shock into a well-prepared milestone.

If you’d like to discuss how to put an education savings plan in place or review your current arrangements, we’d be delighted to help you get started.

Warning: The value of your investment may go down as well as up. Warning: If you invest in this product you may lose some or all of the money you invest. Warning: These figures are estimates only. They are not a reliable guide to the future performance of your investment.