Personal Pensions

What is a Personal Pension Plan?

A personal pension plan is a long-term investment that aims to help you build up a pot of money that you can use to provide an income for yourself when you retire. The value of the benefits payable to you depends on the level of contributions you have paid and the investment return achieved from the funds in your personal pension plan.

Who can take out a Personal Pension Plan?

Personal pension plans are designed for people who don’t have a pension scheme through work and who want to contribute themselves.  As a result, this suits people who are self-employed or have no pension through their employment.

How does it work?

You can invest money regularly or you can make one off payments as and when you want. The minimum regular contribution is €100 per month (or €1,200 a year). You can choose to make regular contributions by direct debit (every month, every three months, every six months or every year), or by cheque every year.

The minimum single contribution is €5,000. If you are already paying regular contributions and you want to add a single contribution the minimum is only €750.

You can choose from a wide range of funds; the ones that are most suitable for you will depend on your retirement goals and your attitude to risk. Your payments will be invested in the funds that you choose with the aim of growing your pension fund. You need to be aware that, regardless of which funds you choose the value of your investment can go down as well as up and you may not get back the value of the original investment. For more information on the funds available please see your Customer Fund Guide.

What happens when you retire?

You can take your retirement benefits from a personal pension plan as follows:

  • At any time after age 60 but before age 75, and
  • At any time in the event of serious ill health.

You do not need to retire in order to draw a retirement benefit. In the case of retirement due to ill health, you will be deemed to be permanently unable to work.

The amount of your benefit will depend on the level of contributions paid and the investment returned earned. On retirement you can choose to take up to 25% of your retirement fund as a tax-free cash lump sum (subject to a lifetime limit of €200,000). Normally once you’ve taken your tax-free cash lump sum, you’ll use the balance of the fund to provide you with a pension which is also known as an ‘annuity’ (a regular income for the rest of your life).

As an alternative to using the balance of the fund to provide you with a pension you can invest the balance of your fund in an Approved Retirement Fund (ARF) or an Approved Minimum Retirement Fund. For further details on ARFs and AMRFs and the rules about accessing them please refer to the At Retirement section.

One final option is that after you have taken your tax-free cash lump sum you can take the balance of the fund as a taxed lump sum subject to paying tax at your marginal (highest) rate of income tax. PRSI and the Universal Social Charge (USC) may also be applicable if you opt to do this. For more details on this please refer to the At Retirement section.

Important information about tax

When we talk about tax, what we say is based on our understanding of current law and tax practice. If there are any changes to law and tax practice in the future they could affect how much your plan is worth and your tax liability. Your plan could also be affected by changes in your personal circumstances.

What’s your commitment?

With a personal pension plan from Aviva you’re committed to:

  • Making either one single payment or making minimum monthly or yearly payments until your retirement date.
  • Using the majority of your pension fund to provide an income or invest it in an ARF when you decide to retire.
  • Investing for the long term; you won't be able to access your pension fund until you retire.
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: Past performance is not a reliable guide to future performance.
Warning: This product may be affected by changes in currency exchange rates.
Warning: Withdrawals and switches from funds investing directly or indirectly in property may be deferred for up to 6 months.
Warning: Withdrawals and switches from all other funds may be deferred for up to 3 months.

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