The last few years has seen the focus on pensions coming from two competing directions, improving governance within in pension schemes and the simplification of pensions. These changes have had unexpected benefits such as improved scope for employer pension contributions. However, some of these changes have also resulted in increased cost on pension schemes due to increased governance.
Our hope for this year’s budget is that the move towards pension simplification is continued. At present, one of the biggest issues in the simplification process is difficulty moving between different types of pensions, in particular if you wish to move from a company pension to a PRSA you need a “Certificate of Benefit Comparison”. These need to be completed by an actuary, and this requirement - which can be expensive to obtain - has meant a roadblock to pension simplification. Hopefully this next budget will remove that obstacle.
The promised introduction of an automatic enrolment pension scheme next year and should bring an improved standard of living in retirement for many in the future, increasing their retirement savings. The introduction of this will also lead to some level of confusion to many employers and employees alike; Revenue have not been generous with the final details of this scheme, leaving much of it opaque. What we do know is that it will favour those on the lower rate of income tax, which is a positive move.
Cost of living increases are most people’s primary focus today, but continuing to plan for retirement should not be allowed to fall by the wayside. Once you retire, should you see similar rises in day-to-day costs, it would have a major effect on your standard of living as your income and your ability to earn is limited. This should be planned for and avoided wherever possible.
If you wish to discuss how any of these issues affect you please reach out to us.
RBK will be holding its annual Breakfast Budget Briefing as a hybrid event in person at the Shamrock Lodge Hotel in Athlone and streaming live online on Wednesday 11th October. Mike Scanlan, Senior Tax Manager, RBK will be analysing the tax measures announced in Budget 2024 and Oliver Mangan, Chief Economist with AIB will look at the economic outlook. In the lead up to the Budget, RBK’s Business and Tax advisors will look at potential tax measures that the Government could consider and areas of concerns that are facing our clients.