First increase in threshold for tax relief on pensions in more than 20 years approved by Cabinet

Finance Minister Jack Chambers is set to significantly increase the threshold for tax relief on pensions. There is currently a threshold of €2m on the overall value of a pension fund that a person can get tax relief on. Mr Chambers has received Cabinet approval to increase this by €200,000 annually for every year up until 2029.

At present, a pension fund that is greater than €2m is taxed at 40pc on all income above the threshold. There have been no changes to the tax relief threshold on pension funds for more than 20 years. People who have approved pensions plans can income tax relief on the contributions they make. There is a limit to the amount of pension contributions you can get tax relief on in any one year. There is also a limit to the total value of your pension fund that gets tax relief.