Irish Pension Information

Cashing in Pension at 50
Everything You Need to Know

Cashing in Pension at 50

Everything You Need To Know

Interested in cashing in your pension from 50 in Ireland? If so… you have come to the right place. 

 

The rules for early pension access change depending on the type of pension you have. This can cause a lot of confusion around early pension access. 

 

You may have a friend who has been able to access their pension but you (same age and same working status) can not.

 

This guide explains the ins and outs of early pension access and includes a free online tool where you can check your eligibility for early pension withdrawal instantly.

Man and Woman sitting at a computer. Woman is taking €100 from a glass jar that has the word pension wrote on a white label.

Early Pension Access

Guide Contents

This guide is very detailed to ensure you get a thorough overview of how early pension access works in Ireland. 

 

We have separated the guide into sections to make it easier to find the information you are looking for.

 

Reading the guide from start to finish will give you the best overview of how early pension access works but if you want to jump straight to a particular section the links below will help. 

Checklist with pencil icon on dark blue background. Link to Pension Access Tool

Instant Online Result

Can you withdraw your pension early?

If you want to check your eligibility for early pension access the tool below will give you an instant result. 

 

If eligible your result page will include more information on the options which are available to you including how much you can take, information on your tax free lump sum and more.

Check Your Eligibility

Early Pension Access Tool

Check if your eligible for early pension access online.

Access Pension From 50 Assessment
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Type of Pension

What type of pension do you have? If you are unsure about the type of pension you have, it is normally an employee pension.

Accessing Employee or Private Pension Early

Cashing in Your Pension Early

If you are interested in early pension access the first step is to find out if you are eligible. 

 

Below you will find the rules that apply for the most common pension types in Ireland.  

Can you withdraw pension early?

Employee Pension

To access an employee pension you must be 50 or over and no longer work for the same employer you grew the pension with. 

If you have an employee pension, you can skip to How Early Pension Access Works.

If your employee pension is a defined benefit scheme you should read the section on Accessing a Defined Benefit Pension Early first.

Coins on hand are dropped Piggy bank on wooden top table, money savings concept

PRSA's

The rules for early access of a PRSA also known as a Personal Retirement Savings Account differ depending on how your pension contributions were made.

 

To make things simpler we have broken PRSA’s into two sections. 

PRSA's with Employer Contributions

A PRSA with Employer Contributions is a pension where your employer has paid into your PRSA for you.

You would normally have this type of pension if your employer did not offer an employee pension scheme at the time but paid into a PRSA for you instead.

You may also have this type of pension if you had a limited company and the company made contributions to your pension on your behalf.

If you have a PRSA with Employer Contributions early access is available from 50 once you are out of work. If you are currently working early access is not available until you reach 60. 

 

If this is the type of pension plan you have you can skip to the next section for more relevant information. 

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PRSA's with Personal Contributions

A PRSA with Personal Contributions is a pension where you paid the contributions to your pension yourself.

 

You would normally have this type of pension if you were self-employed or a sole trader.

 

You could also have this type of pension if you wanted to make further contributions to your pension on top of an existing employer’s scheme.

 

If you have a PRSA with Personal Contributions only, early access is only available from 60. 

PRB / Buy Out Bond

You can access a Personal Retirement Bond (PRB) also known as a Buy Out Bond from age 50.

Do I have to be...

Out of Work to Access My Pension

No. In most cases, you will be able to access your pension early and continue to work with no issues.

 

The rules regarding working and accessing your pension early are different depending on your pension type.

 

Below we have broken down the rules by pension type to make it easier for you to see if you meet the criteria.  

Employee Pension
You can continue to work and access your pension at the same time. You must not be working with the same employer you grew your pension with.
PRSA Employer Contributions
If between 50-60 you must be out of work to access this pension. You can return to work as normal after.

If 60 or over you can access this pension while working.
PRSA Personal Contributions
You can access this pension from 60. You can continue to work as normal.
Buy Out Bond or PRB
You can access this pension once you are 50 or over.
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Where to Next?

The next section is for those with a Defined Benefit pension. these are pretty rare. If you don’t have a defined benefit pension you can skip ahead. 

Can I Access My Pension Early?

Defined Benefit Pensions

A defined benefit pension is a pension plan that promises to pay out a specified amount to you in retirement. 

 

With other pension plans, you contribute each month, and the amount you receive in retirement depends on how well your funds have performed while invested. 

 

What makes defined benefit pensions so valuable is the fact that they are not dependent on investment performance. The funds are invested as normal but regardless of how the fund performs you will receive the amount that has been specified when you retire.

 

Companies soon caught on that Defined Benefit Pensions left them exposed in that if the pension fund did not perform well the companies themselves would have to add the money needed to meet the pension payments promised to their staff members. 

 

As a result Defined Benefit Pensions are rare. Nowadays companies go for the defined contribution model which means payments in retirement are linked to the performance of the pension fund while invested. Companies do not need to step in as they haven’t promised a specified amount to their staff in retirement.  

 

Concept of pension or retirement plan on white background

Can I access my Defined Benefit Pension Early?

Yes, a defined benefit pension is an employee pension so to access it you just need to meet the below requirements 

  1. Be 50 or Over
  2. No Longer Work With Same Employer

 

The real question when it comes to defined-benefit pensions is should you access them.

Should I access my Defined Benefit Pension Early?

You now know why Defined Benefit pensions are so valuable. Whether or not access is a good idea will depend on your individual circumstances and the transfer value offered.  

Transfer Value

If accessing your pension early from 50 the first step you will take is speaking to a financial advisor to get your options. 

As part of your review, your financial advisor will request a transfer value from your pension provider. This is essentially how much your pension provider will give you now in return for not having to pay you the specified amount in retirement. 

Transfer values can be good or bad. This means the transfer value offered could make good financial sense meaning your pension provider is happy to pay you a little more than they should now to remove their liability in the future. 

Transfer values can also be poor and if this is the case you may take a significant financial loss when accessing your pension early. 

To ensure this doesn’t happen it is important to deal with an experienced financial advisor when accessing your pension.

They can assess your transfer value and advise whether or not early access makes sense for you.

If your circumstances dictate early pension access is a must regardless of the transfer value, your advisor will work with you to maximise the financial benefit to you. 

How it works?

Can I Withdraw My Pension Early?

Before you decide whether or not early pension access is right for you, it is important that you fully understand the options that are available to you.

 

The first step is talking with a qualified financial advisor and having your pension reviewed. As part of your review your financial advisor should prepare each of the early pension access options to you. 

 

You can work with your existing financial advisor or if you prefer our broker partners offer this service for free with no obligation.

 

Step 1

Complete Form

Letter of Authority

Your advisor will ask you to complete a one page form with you name contact details and a signature.

Your advisor will use this form to request the details of your pension from your pension provider directly.

Step 2

Early Access Pension Review

Confirm Eligibility

Your advisor will receive the details of your pension from your provider and will review the rules associated with your particular pension plan.

Step 3

Get Your Options

Your Options

Your financial advisor will prepare a list of your early pension access options.

This will include details on the tax free amount that is available to you in addition to an indication of your tax liability should you wish to take more than your tax free amount from your fund.

Step 4

Make a Decision

Weigh Up Your Options

Review your options and decide whether or not early pension access is right for you.

You don't need to pay any fees to get your options so if Early Pension Access is not right for you simply close your free review.

Early Pension Access Step By Step

Need Help?

Your questions should be answered as you make your way through the Pension Access Information step by step. 

If we haven’t answered your question by the time you complete the process please contact us for more help.

Can you Cash in Your Pension Early at 50?

Yes, you can cash in your employee pension early from age 50 once you no longer work for the same employer you had the pension with. 


The rules for early pension access differ depending on the type of pension you have. This can often cause confusion as your friend may be able to access their pension but you (same age, same working status) may not. 


This article is for those who want straight forward information on early pension access without the usual jargon.

Video Explainer

Can You Take Money Out Of Your Pension?

Yes, you can take money out of an old employee pension from 50. This article will help explain all the ins and outs of accessing your pension early. This can help you make an informed decision on whether or not early pension access is right for you. 

We will start by looking at the different types of pension plans and the rules associated with them for early pension access. 

Next, you can use our Pension Access Tool to get an indication of whether or not you can access your pension. Finally, if access is possible we will explain the options that might be open to you in relation to your early access.

Woman checking her pension performance on paper.

One Minute Breakdown on Cashing in Pension at 50 Ireland

In most cases if you are over 50 and have a pension from an old employer you will be able to access some or all of this pension early. There is no requirement for you to stop working to access your pension. 


If eligible you will have the option to take 25% of your fund tax free. You can then decide to access the remainder of the fund as a taxable payment or reinvest it into an Approved Retirement Fund also known as an ARF.


 If you access the remaining amount it is taxed as if you were receiving the funds as income. So if you are on the higher tax rate you will pay the higher tax rate on the remaining funds withdrawn. 


In these cases, many people access the tax free lump sum and reinvest the remainder to take at a later date to avoid the higher tax bill.


This is just a quick breakdown on how accessing your pension early works. If you are interested in early pension access we recommend reading on.

Your Pension Plan & Early Access

Whether or not you can access your pension will depend on the type of pension plan you have. We go through each of the different pension plans and explain when access is possible below. 

 

Withdraw Occupational / Employer Pension Early

If you have an occupational pension including both Defined Benefit and/or a Defined Contribution pension you can access it from 50 once you are no longer working for the company you held the pension with. There are no exceptions to this rule. 


If your pension provider have said you are unable to access the pension until you reach the retirement age of the scheme, this is not the case. You will be able to access your fund with the help of a financial advisor.  

At What Age Can Your Cash In a Private Pension (PRSA)

You can cash in a private pension (PRSA) from 50 if it has employer contributions and you are not working. If there have been no employer contributions then you can cash in your private pension from 60.   

 

It is important to note that if you owned a limited company but made contributions to your pension from the limited company and not personally you could qualify. 

 

Please note to access a PRSA before 60 you must not be working.

 

PRSA access can be a grey area. If you are unsure whether or not you might be eligible for early access please continue with the step by step process and we can explain how you can have your eligibility checked by an advisor free of charge.

 

Piggy Bank with €50 notes and a calculator.

Withdraw Personal Retirement Bond (PRB) or Buy Out Bond Early

If you have a Personal Retirement Bond you will be able to access your fund from 50. You may have a Personal Retirement Bond if you left your employer and moved your pension. 


If you have moved your pension to your new employer and are still working with them access won’t be possible. 


In some cases, if you have moved your pension from a previous employer it could have been placed into a PRSA. If this is the case you will be subject to the PRSA rules above.  

I Don't Know What Type of Pension I Have...

If you are unsure what type of pension you have, you probably have an occupational pension. To have a different type of pension plan, you would normally need to  approach a financial advisor to set up the pension. If this were the case, you would normally be familiar with the type of pension plan you had set up. 


Either way we can help you. Please continue with the steps and enter I don’t know for your pension plan. If you meet all the other requirements for access, we can show you how to have your pension plan checked by an advisor free of charge. 

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Accessing a Defined Benefit Pension Early

You can access a defined benefit pension when you turn 50 once you no longer work with the same employer you grew your pension with. 

 

 

There are special considerations which must be taken into account before deciding whether or not to access your defined benefit pension early. 

 

 

When you have a defined benefit or DB pension you are promised a specified income in retirement. If you are interested in accessing a DB pension early you will be offered a transfer value. This transfer value takes into account the growth lost on your retirement funds by accessing your fund early. 

 

 

Transfer values can differ greatly and it is important to have a financial advisor review the transfer value you are being offered by the scheme to ensure it makes financial sense for you to access your fund early. 

 

 

In order to access your DB fund early your advisor will review and discuss your transfer value with you explaining all the ins and outs of early pension access so you can make an informed decision with regard to access. 

 

 

If you do decide to access your fund, your transfer value will be sent by your pension provider to a PRB or personal retirement bond in your own name. Once in the PRB your advisor will send an instruction to access all or a potion of your funds depending on your requirements. 

 

 

If you decide to partially access the fund, for example to take your 25% tax free lump sum and leave the remainder. The remainder will stay in the PRB/Personal Retirement Bond. You can then reinvest the funds to grow them with a view to accessing them at a later date.  

 

 

It is important that your advisor you work with has experience with Defined Benefit schemes so they can advise you correctly. 

 

 

If you would like to have an advisor prepare your pension access options for your defined benefit pension please check if you are eligible for access below first.

 

 

There will be a section to add additional information. Please note that your pension is a defined benefit scheme and our team will connect you with an experienced advisor who will complete your free no obligation access review. 

 

Can You Withdraw Your Pension Early?

Yes, you can withdraw your pension early if you meet the eligibility criteria for early access. In some cases, you may have contacted your pension provider directly and they may have advised access is not possible until you reach the retirement age of your scheme. 

 

This is not the case. Your advisor can transfer your pension into a PRB and remove the age restriction from your fund. This allows you to access your funds from 50. 

 

Tax written on wooden scrabble letters.

Pension Lump Sum at 50

You can take a Pension Lump Sum at 50  if you have an old employer pension or a private pension that an employer has contributed to. If accessing a private pension you must be out work. You do not need to be out of work to take a pension lump sum at 50 from an old employer scheme. When you access your pension you are automatically entitled to take 25% of your pension pot tax free. The tax free amount received can not be over €200,000 during your lifetime.

 

There is a second calculation known as salary and service which may give you access to a higher tax free amount. This calculation is run by your financial advisor when preparing your options to see if you can take more than 25% tax free from your pension.

 

Infographic showing you can access 25% of your pension tax free at 50 and reinvest the remainder or withdraw it as a taxable lump sum.

Tax on Early Pension Withdrawal

When you access your pension you are automatically entitled to take 25% of your pension pot tax free. Once the tax free amount does not go over €200,000. 

 

 

If you want to access an amount over your tax free lump sum, you are taxed on it as if it were an income. So if you are currently on the 40% tax rate you will be taxed at 40%. If you are on the standard tax rate you will be charged the standard tax rate on any income you receive below the tax cut off point of €40,000. 

 

 

For example if you earn €30,000 per year you could take €10,000 from your pension at the standard tax rate before you would reach the €40,000 standard cut off point. 

 

 

If you were to take anything over this amount you would be charged 40% tax on it. There are creative ways to avoid this for example by taking €10,000 one year and then another lump sum the following year to keep all your tax at the standard rate. 

 

 

Your advisor will be able to give you an indication of the tax liability you will have based on withdrawing certain amounts over your tax free lump sum. You can decide to take only your tax free lump sum and reinvest the remainder to take at a later date. 

Can I take my pension at 55 and still work?

Yes. You can continue to work and access an old pension with one exception. If you are accessing a PRSA and are under 60, you cannot be working while accessing the pension. You can return to work after you have accessed the fund. 

How to Access Your Pension Early?

A financial advisor can help you to access your pension early. If you are eligible for access your advisor will complete a free pension access review.

 

 

This review provides you with all the information you need to decide whether or not early pension access is right for you. It is free and there is no obligation to proceed.

 

 

If you decide to proceed with early pension access your advisor will complete the paperwork with you in person or over the phone. Your advisor then processes the access for you. 

 

 

The first step is checking whether or not you are eligible to access your pension. You can do this using our pension access checker.

 

Questions You Might Have

No. You can take as much or as little as you want from your fund. Normally all of your fund is transferred into a Personal Retirement Bond to enable access. You the take the amount you have chosen from the Personal Retirement bond and reinvest the remainder in an Approved Retirement Fund (ARF) so it keeps growing for you to take at a later date.  

STEP 2 - Pension Access Tool

If you are interested in finding out whether or not you can access your pension early try our Pension Access Tool which delivers an Instant Online Result for you.