Auto Enrolment Boosts Pension Saving – But High‑Rate Taxpayers Should Look Closer
Auto enrolment launched in January 2026 and is now fully operational. About one‑third of private‑sector workers have no occupational or private pension, and just 35 % contribute to a supplementary plan. Under the MyFutureFund system, employees aged 23–60 earning more than €20 000 are automatically enrolled unless they already have a pension. The Government aims to increase coverage to 70 %. This article examines auto enrolment Ireland high‑rate taxpayers and what higher‑rate earners need to know.
For every €3 saved by an employee, the employer matches another €3 and the State adds €1. Contribution rates begin at 1.5 % of salary and rise gradually to 6 % over a decade.
Why auto enrolment isn’t always ideal for 40 % taxpayers
Auto enrolment is excellent for standard‑rate taxpayers but less attractive for higher‑rate taxpayers in their thirties and forties. Traditional personal or company pensions provide 40 % income‑tax relief: a €60 net payment is topped up by €40 in tax relief to make a €100 contribution. Auto enrolment replaces tax relief with a 33 % State top‑up, equivalent to 25 % relief, so a 40 % taxpayer pays €300 to achieve a €700 total contribution, whereas a private pension would cost €240. In addition, employer and State contributions stop at earnings above €80 000. Participants have limited investment choice and cannot access their savings until the State Pension age (currently 66), while personal and occupational schemes often allow early access and broader investment options.
Tailor your pension strategy
Auto enrolment is a welcome reform that will increase coverage and help low‑ and middle‑income workers save for retirement. But it is not a one‑size‑fits‑all solution. High‑rate taxpayers should compare the tax relief and flexibility of personal pensions with the more limited benefits offered by auto enrolment.
Ferris Financial Planning specialises in designing tax‑efficient pension strategies. If you’re unsure whether auto enrolment or a private pension is right for you, contact us — our team will assess your income, tax position and retirement goals and create a pension plan that maximises your wealth. Visit our Get Started page to begin your journey. Take control of your retirement today and secure the future you deserve.
For more information about the scheme, see the official My Future Fund page .
