PRSA

These are a relatively new type of low cost and easy to understand personal savings plan that has been designed by the Government to increase pension coverage in Ireland.

• An individual who wishes to save for retirement can take out a PRSA. However you will only receive tax relief on non-pensionable earnings and self-employed earnings from a trade or profession.

Tax Relief:

• If you are not a member of an employee pension arrangement or if you are self-employed you will be able to claim full Income Tax relief and PRSI/Health Levy relief on PRSA contributions up to the following limits:
• Tax relief is limited to Net Relevant Earnings up to a maximum of €254,000 in any tax year.

Features:

• They are very flexible and allow you to continue to contribute irrespective of your employment situation. You can also bring them on from one employer to another and can move from one PRSA provider to another without charge.

Types:

There are two types of PRSA, Standard and Non-Standard with most of the providers concentrating on the former.

• Standard : Charges are restricted to a maximum of 5% of contributions and 1% of the accumulated fund.

• Non-Standard : No cap on charges and tend to have wider fund choice.

In both cases the relevant PRSA contract will have a default investment strategy for investors who do not wish to choose their own investment fund.

No Risk Benefits:

• The cost of risk benefits, for example life assurance and serious illness cover cannot be deducted from PRSA contributions or funds.

Access

• Access in 50 years onwards.