The Standard Fund Threshold, and how much of it you would use.
Revenue caps the pension savings that get full tax relief. The cap is rising every year to 2029, so when you take your benefits changes how much room you have. See where you stand, and what a lump sum would be taxed.
Rules as at 24 September 2026. Budget 2027 is on 6 October 2026 and could change them.
Your details
Slide, or tap a value to type any amount.
Every pension you have, added up. A defined benefit pension is given a capital value using Revenue’s factors, which Damian can work out with you.
Usually up to 25% of a fund, within limits. The bands below apply to all your retirement lump sums together, over your lifetime.
€1,650,000 taken in 2026 uses 75% of that year’s threshold, leaving €550,000 of headroom.
The threshold, year by year
- 2025€2.0m
- 2026€2.2m
- 2027€2.4m
- 2028€2.6m
- 2029€2.8m
- 2030 onAt least €2.8m
Set by Finance Act 2024. From 2030 it rises each year with average earnings, as the CSO measures them, and cannot fall.
Over the threshold
What is left of the excess stays in the pension and is taxed again as income when it is drawn. The Department of Finance’s independent examination of the threshold (2024) put the combined rate at up to 68.8%, or 71.2% with PRSI.
Tax on the lump sum
| The first €200,000, tax-free | €200,000 |
|---|---|
| The next €300,000, at 20% | €200,000 |
| Tax at 20% | €40,000 |
| Above €500,000, taxed as income | €0 |
Anything above €500,000 is taxed as income at your marginal rate, usually 40%, plus USC. The €500,000 has been fixed since 1 January 2025, so it no longer rises with the threshold.
Close to the threshold, or over it?
Timing, the order benefits are taken in, and how a defined benefit pension is valued all change the answer, and the tax on getting it wrong is steep. Damian works through this with directors and higher earners in a free 20-minute call.
This page is information, not advice. It applies Revenue’s published figures to the numbers you choose. It does not value your pensions, does not know your tax position, and is not a recommendation about when or how to take your benefits. Advice on that is given in a personal consultation with Damian.
The rules behind these numbers
- The Standard Fund Threshold is €2.2 million for 2026, €2.4 million for 2027, €2.6 million for 2028 and €2.8 million for 2029 (Finance Act 2024, section 13). It was €2 million from 2014 to 2025. From 2030 it follows average weekly earnings as the CSO measures them, and it can never fall, so a year from 2030 on is shown here at €2.8 million, the least it can be.
- The threshold is measured each time you take a benefit, against everything you have taken since 7 December 2005. This page treats all your pensions as taken in one year.
- Any excess is taxed at 40% when the benefit is taken, as chargeable excess tax, with no reliefs set against it. Tax paid at 20% on a lump sum, up to €60,000, can be set against it. See Revenue’s page on chargeable excess tax.
- Retirement lump sums: the first €200,000 is tax-free over your lifetime, the next €300,000 is taxed at 20%, and the rest is taxed as income at your marginal rate, with USC (Revenue Pensions Manual, chapter 27).
- A Personal Fund Threshold, granted to people whose pensions were already above the threshold when it was cut, may apply instead of the figures here.
- Figures are illustrations, not a guarantee of any outcome, and not personalised advice. Tax rules can change at any Budget.