Tax-free lump sum

At retirement everybody has the option of taking a tax-free lump sum. Most people take the maximum amount allowed under this option. The level of tax-free lump sum you can take will depend on the type of pension plan you have and your personal circumstances.

The overall tax-free cash from all your pension arrangements can't be more than €200,000. Any lump sum payment over this limit will be taxed at the standard rate of tax up to a limit of €500,000, as of January 2014.

The maximum allowable pension fund for tax purposes you can have is €2 million (as at January 2014) from all sources. If you have pension funds over this amount, it may affect the tax you pay and you should consult your Financial Advisor.