A personal pension plan is for self-employed individuals,
workers whose employer does not offer a pension scheme, or
for workers who do not wish to join their employers’ scheme,
and is entirely funded by the individual. Tax relief is
available for contributions and the amount of tax relief is
age-related.
With a Personal Pension, your money is invested
with an insurance company who invest your premiums in an
investment fund (you can move between different funds as often
as you like).
When you retire you have various options as to
what you do with your fund (see Approved Retirement Funds). The
size of your pension income when you retire is affected by
the length of time your money is invested for. Depending on
the return earned by your pension fund, a euro put aside in
your mid-twenties can be worth between two and a half and four
and a half times a euro put aside in your mid-fifties.