Pension AVC

NGUYEN01

I have 20 years to retirement, I am on a good salary. I took some unpaid leave over a year ago and then started a new job.

I therefore made no pension contributions for over a year - I am now considering making an AVC payment before the Oct 31st deadline, but just wanted to get people's opinion on this, as pension have not been performing so well in the last number of years. My new pension scheme is a PRSA.

Would I be better off holding onto the funds and putting them into an investment product or making the AVC and getting the tax relief?
Any thoughts?

Thanks

eagle_i

Without doubt put it into your Pension! By putting it into an ordinary investment bond you are not only losing out on the tax relief on the money going into the plan, but any investment return is subject to an exit tax on maturity/surrender. Whereas, in a pension arrangement the investment is in a tax exempt investment and is not subject to exit tax.

With regard to the investment performance, all investments - your ordinary investment bonds as well as your pension investment have been hit in some way or other. Your investment choices between investment bonds and pension products are much the same, only difference is the pension product is a tax exempt investment. I've said this in another post, the way you need to look at the drop in the market, is when the fund prices are down your buying power has increased. As such 'buy low sell high!'