Budget speculation grows as State pension rise anticipated

With the budget only seven weeks away, speculation about its contents is gathering momentum, as The Irish Times reports. Tánaiste Simon Harris has recently repeated his emphasis on the importance of 'rewarding work', with an increase in the weekly State pension of at least €10 to €15 appearing on the cards for budget day on October 6th. While such an increase would be welcome, the newspaper argues the Government needs to do more to improve the lot of the retired or those nearing retirement, noting many struggle to make ends meet on the State pension alone and supplement it with a private pension.

Call to end 'demonising' of high earners

The Irish Times has criticised what it describes as an 'unhelpful narrative' around the pensions of high earners, which it says has led to a reluctance from the Government to support them, even penalising them by restricting tax-efficient retirement planning. The newspaper points to a U-turn in 2025 on measures introduced under the Finance Act 2022, which had recognised the need to give business owners nearing retirement the chance to catch up on their pensions in a tax-efficient way. As a result, the amount of tax relief entrepreneurs can claim on their Personal Retirement Savings Account (PRSA) was substantially reduced, meaning many business owners have been unable to catch up on years of underfunding their pension.

Attention has focused on the Standard Fund Threshold (SFT), which increased from €2 million to 8 million in January 2026. The SFT is set to increase by €200,000 a year between now and 2029, reaching 4 million in 2027, 6 million in 2028, and 8 million in 2029. From 2030 onwards, the threshold will be indexed to wage growth. A 40 per cent tax is charged to those whose pension pot exceeds the SFT, which largely affects high earners and long-serving professionals whose pension funds are large enough to approach or breach the current €2 million limit. Some commentators and politicians dub such individuals 'pension millionaires'.

Glenn Gaughran, head of business development with the Independent Trustee Company, is quoted in The Irish Times on the impact of the threshold. A survey of 215 financial advisers, cited by the newspaper, found that more than two-thirds (64 per cent) said many high earners would retire later to maximise their pensions, while about 15 per cent said some would retire earlier.

New personal-investment account scheme announced

In a separate development, RTÉ reports that no deemed disposal, a tax-free threshold, and no minimum contribution will be among the key features of the Government's new personal-investment account scheme. Tánaiste and Minister for Finance Simon Harris is due to announce a roadmap for the new State-backed accounts scheme, expected to be up and running early next year.

The roadmap, seen by RTÉ News, reveals that deemed disposal tax will not apply to any funds held in investment accounts. Under deemed disposal, every eight years certain investments are treated as if they have been sold for tax purposes, even if there has been no sale, and any gains are taxed at 38 per cent. The controversial tax is designed to combat tax avoidance.

Instead, under the Government's plan, providers will be responsible for calculating, reporting, and paying any tax due to revenue on behalf of investors. The account will also have a tax-free threshold, with a low flat rate of tax applying annually to the value of accounts above that threshold; below this threshold no tax will be due.

Savers will be able to invest in shares, bonds, and ETFs, but risky products such as crypto assets and derivatives will not be allowed. There will be no minimum contribution, holding or lock-in period for investors, and they will be allowed to move their accounts between providers with no tax liability. An annual maximum contribution limit will apply, with the specific amounts to be announced in October's budget.

Any Irish tax resident aged 18 and over will be eligible to open one of the new personal investment accounts. Eligible providers will include MiFID-authorised service providers, regulated fund managers, and regulated insurers or firms.