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AVCs

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  • 14-03-2009 8:22pm
    #1
    gowayouttadat
    Registered Users Posts: 506 ✭✭✭


    Can somebody explain AVCs and the tax benefits of making AVC contributions on top of normal pension contributions?


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    #2
    copacetic
    Subscribers Posts: 16,586 ✭✭✭✭copacetic


    basically you can put in extra contributions tax free to a certain limit depending on your age. eg up to 20% of your salary in total if between 30-40 iirc.
    i.e if you get a 10% pension from your job, then you can put in 10% additional contributions and get tax relief at the higher rate on them (assuming you are a higher rate tax payer). i.e You get to put nearly double into your pension what you would have gotten after tax in your hand. i.e instead of roughly 54 euro in your hand, you get to put 100 into your pension.

    Its a great way of putting money into your pension if you can afford it. Rumours the relief will be reduced to standard rate in the budget though.


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    #3
    cgf
    Closed Accounts Posts: 545 ✭✭✭cgf


    Some blurb on it with the max contribution rates. Note these rates are the maximum for the Employee contributions - both 'regular' contributions & AVCs. They do not include the Employers contribution.

    http://www.finfacts.ie/fincentre/avcs.htm

    Expect some sort of cap or adjustment down to standard tax relief early next month :mad:


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    #4
    alibabba
    Registered Users Posts: 1,240 ✭✭✭alibabba


    He said it would be madness to pay AVCs at the moment, is he right ?


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    #5
    [Deleted User]
    Posts: 281 ✭✭ [Deleted User]


    See this post http://www.boards.ie/vbulletin/showpost.php?p=59482611&postcount=5

    Capping or adjusting tax relief on pension contributions at this moment in time would be 'madness'.


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    #6
    alibabba
    Registered Users Posts: 1,240 ✭✭✭alibabba


    Deleted User wrote: »
    See this post http://www.boards.ie/vbulletin/showpost.php?p=59482611&postcount=5

    Capping or adjusting tax relief on pension contributions at this moment in time would be 'madness'.

    thanks


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    #7
    copacetic
    Subscribers Posts: 16,586 ✭✭✭✭copacetic


    alibabba wrote: »
    He said it would be madness to pay AVCs at the moment, is he right ?

    depends, they are losing you money at the moment, but the more you put in a fund at the bottom of the market the more it will be worth in the end assuming things pickup.

    So there are two totally different ways of looking at it. Personally I've stopped mine for the time being.


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    #8
    alibabba
    Registered Users Posts: 1,240 ✭✭✭alibabba


    no ,im not losing money cos i only started the avcs last xmas, when the prices were low.


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