Skip to content 
Table of Contents
Maybe you haven’t given much thought to your retirement yet, or perhaps you’re thinking, “I’ll be fine once I get the State Pension.” However, there are a few key points to consider when planning for the future. Retirement planning is the smartest way to make sure your golden years are truly golden, so you don’t find yourself short on money just when you should be relaxing and enjoying life.
Here’s one truth that might come as a bit of a shock: the State Pension might not be enough to cover your needs in retirement. With the rising cost of groceries, bills, healthcare, and everything in between, it can be tough to get by, let alone live comfortably.
That’s where a private pension can make all the difference. It’s the gap between just scraping by and actually having the freedom to enjoy your retirement with peace of mind.
First, What Even Is a Private Pension?
A private pension is a long-term savings plan with significant tax benefits, designed to help you accumulate a nest egg for retirement.
The State Pension (Contributory) starts at a set age (currently 66 in 2025), but to qualify, you need to have made a minimum number of PRSI contributions.
A private pension, on the other hand, is something you control; it’s personal, flexible, and designed to suit your lifestyle and retirement goals.
The Main Types of Private Pensions in Ireland
The right type of pension depends on your personal circumstances, such as your job and retirement goals. That’s why it’s important to speak with a financial advisor before making any decisions. They can help you choose the option that best suits you. In the meantime, here’s a simple breakdown of the main types of pensions in Ireland:
Personal Pension Plans
It is a retirement savings plan that you set up independently if you’re self-employed or not in a company pension scheme. You decide how much to contribute, and you get tax relief on your payments.
PRSA (Personal Retirement Savings Account)
A flexible pension account that anyone can open. Suitable for people who switch jobs often or aren’t sure about long-term employment. There are Standard PRSAs (low fees, regulated investments) and Non-Standard PRSAs (more investment choice, possibly higher fees).
Company or Occupational Pension Schemes
Provided by your employer. They might match or top up your contributions, essentially providing free money. You may also have a Defined Contribution (DC) plan (most common) or a Defined Benefit (DB) plan (less common, but gold dust if you have one).
Read more about Setting Up a Private Pension in Ireland.
Reasons Why You Should Have a Private Pension
The State Pension Gives You a Base, Not the Full Package
The State Pension in Ireland is a valuable foundation for retirement income; however, for many people, it may not be sufficient to support the lifestyle they hope to enjoy. With the cost of living rising, it’s essential to look ahead and ask yourself: Will €289.30 per week (as of January 2025) — roughly €15,100 a year — be enough to cover my bills, groceries, healthcare, and the occasional holiday or hobby?
If the answer is no, then it’s time to consider a private pension. It’s not just a backup plan, it’s a vital tool to help you maintain your quality of life in retirement. A private pension can provide an extra income stream to cover day-to-day expenses, unexpected costs, and the things that make life enjoyable. Depending solely on the State Pension could mean just getting by. A private pension helps ensure you retire with dignity, security, and freedom.
Be smart with your money. Get a personalised quote today!
You Choose When to Retire
Currently, the qualifying age for the Irish State Pension is 66; however, with Ireland’s population ageing and people living longer, this age is likely to increase in the future. If you’re hoping to retire earlier, say in your early 60s or even late 50s, you’ll need to plan ahead.
One smart way to do this is by maximising your pension contributions, either through Additional Voluntary Contributions (AVCs) if you’re already in a pension scheme, or by starting your own private pension.
With a private pension, you may be able to retire earlier than you think, depending on the specific plan you have. In most cases, you can access your pension benefits any time between the ages of 60 and 75, and in some situations, you might even be able to retire as early as 50.
Many people dream of stepping away from full-time work before the State Pension kicks in. With the right plan and consistent contributions, early retirement can become more than just a dream; it can be your reality.
Private Pensions Come with Tax Benefits
Here’s the bright side: when you contribute to a private pension (like a PRSA or personal pension), you get income tax relief at your marginal rate, which means if you’re on the 40% tax rate, a €100 contribution only costs you €60. Plus, your investments grow tax‑free, something regular savings accounts just don’t do.
Read about 7 Smart Ways to Use Tax Relief to Grow Your Pension in Ireland.
Let Compound Growth Work Its Magic
When it comes to pensions, the earlier you start, the better, and it’s all thanks to the power of compound growth. Simply put, compounding means your money earns returns, and then those returns earn more returns over time. It’s like a snowball effect: the longer your money stays invested, the more it grows, without you having to do anything.
Even if you’re only making small, regular contributions, they can add up significantly over the years. That’s why starting now, even with a modest amount, can make a big difference to your future retirement pot.
A Safety Net for Your Loved Ones
If the worst happens before you retire, having a private pension can mean the difference between financial stress and stability for those you leave behind. The good news is that the full value of your private pension, such as a PRSA or Personal Retirement Bond, can typically be passed on to your estate if you die before retirement. That means your savings don’t vanish: they can help support your family or beneficiaries.
One key step to ensure your wishes are followed: always keep your beneficiary nominations up to date, and consider having a clear will. That way, your pension, an often overlooked but valuable asset, doesn’t fall through the cracks when it matters most.
Read more about What Happens To Your Pension Plan When You Die?
Your Pension Moves with You
One of the key reasons for having a private pension is its portability. Unlike some workplace benefits that stop when you change jobs, a private pension can move with you. Whether you switch employers, change industries, or become self-employed, you can usually continue contributing to the same plan without losing the benefits you’ve already built up. That kind of flexibility keeps your retirement savings on track, no matter where your career takes you.
If you’ve worked in different jobs over the years, you may also have multiple pension pots scattered across old employers. Keeping track of them is important for your financial future. That’s where our pension tracing service comes in; we help you find forgotten pensions and consider consolidating them for a more straightforward, more manageable retirement strategy.
To learn more, read: Pension Tracing in Ireland: Discover Hidden Wealth
Flexible Options When You Retire
Another great reason to have a private pension is the flexibility it gives you when it’s time to retire. When you access your pension, you can usually take out 25% of your pension pot as a tax-free lump sum (up to €200,000). This can be a helpful boost to cover big expenses, pay off debts, or simply enjoy your early retirement years.
With the remaining balance, you can choose how to draw your income, either through an annuity, which gives you a guaranteed income for life, or an Approved Retirement Fund (ARF), which allows your money to stay invested and gives you more control over withdrawals. Having these options means you can tailor your retirement income to suit your lifestyle and financial goals.
To make the most of your retirement and build a strategy that suits your goals, don’t miss our Essential Guide to Pension and Retirement Planning. It’s packed with simple, practical tips to help you understand your options and make informed decisions.
Be smart with your money. Get a personalised quote today!
Get a Pension and Retirement Planning Quote
A private pension isn’t just about preparing for the future, it’s about creating the kind of retirement you truly want. Whether that means peace of mind, the freedom to travel, or simply not having to stress about bills, it’s all within reach.
Get a quote today, we’re happy to help you build a retirement strategy that works for you. We’ll provide clear, personalised information so you can make confident, informed decisions about your financial future.
We provide a wide variety of financial services, such as mortgages, serious illness cover, pensions, financial planning, health insurance, and savings & investments.
Share this post
All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down and up.
Warning: If you invest in this product, you will not have any access to your money until you retire.
Warning: If you invest in this product, you may lose some or all of your investment.
Warning: This product may be affected by changes in currency exchange rates.
