Level of Savings

Smee_Again

dublin49 wrote: »

surely the tax relief aspect of pensions is overstated ,its just Tax deferred until you get it in old age. no?

It’s compounded over the years though, makes a huge difference.

Plus there’s a tax free lump sum element too.

dublin49

Smee_Again wrote: »

It’s compounded over the years though, makes a huge difference.

Plus there’s a tax free lump sum element too.

Fair enough,forgot about lump sum which can be a huge help with kids looking for house buying hand outs

Padre_Pio

Smee_Again wrote: »

It’s compounded over the years though, makes a huge difference.

Plus there’s a tax free lump sum element too.

and the tax at the end is most likely less than the tax now. I maxed my AVC and I'm still on the upper bracket. definitely wont be when im drawing down

Geuze

dublin49 wrote: »

surely the tax relief aspect of pensions is overstated ,its just Tax deferred until you get it in old age. no?

No.

My parents saved 40%+ tax relief on conts.

In retirement, they pay under 10% effective rate on their income.

So there is a tax saving.

The J Stands for Jay

dublin49 wrote: »

surely the tax relief aspect of pensions is overstated ,its just Tax deferred until you get it in old age. no?

There's a large element of deferral, but it's deferring at the higher rate of tax when you're earnings are high, then paying the tax when your earnings are low, and likely to be mainly taxed at the lower rate. And then there's the tax free lump sum.