Think of AVCs as your pension top-up – they work alongside your regular pension contributions to help bridge the gap between what you’re currently saving and what you’ll actually need in retirement. With full tax relief available on contributions (within Revenue limits), AVCs represent one of the most effective ways to enhance your retirement planning while reducing your current tax bill.
AVCs are particularly valuable if you:
Whether you’re in your 30s looking to get ahead or approaching retirement and realising you need to boost your pension savings, AVC pensions offer the flexibility to contribute when it suits your financial situation.
AVCs offer immediate tax relief at your marginal rate – meaning higher-rate taxpayers can save up to 40% on contributions.
Unlike many other investments, your money works harder from day one because the government effectively subsidises your retirement savings.
Your AVC contributions are invested in professionally managed funds, with potential for growth over time. The earlier you start, the more time compound growth has to work in your favour.
You can make AVCs as:
When you retire, you can take up to 25% of your total AVC fund as a tax-free lump sum (subject to a maximum of €200,000), with the remainder providing additional pension income.
Your maximum AVC pension contribution depends on your age and is calculated as a percentage of your annual earnings (up to €115,000):
| Age | Maximum Annual Contribution |
|---|---|
| Under 30 | 15% of earnings |
| 30-39 | 15% of earnings |
| 40-49 | 25% of earnings |
| 50-54 | 30% of earnings |
| 55-59 | 35% of earnings |
| 60+ | 40% of earnings |
Note: This includes both your regular pension contributions and any AVCs combined.
Example: If you’re 45 years old earning €60,000 annually, you could contribute up to €15,000 per year (25%) to your pension, including AVCs, and receive full tax relief.
Check what you’re already contributing and identify any shortfall
Decide between regular monthly payments or lump sum contributions
Choose from a range of funds based on your risk tolerance and retirement timeline
Your employer’s pension provider can usually arrange AVCs, or you can set up a separate AVC plan
to understand and calculate how much you should be contributing.
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