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Good news if you have a private pension: The levy is on its way out

The levy will be reduced from 2015 and will be abolished at the end of next year.

Image: piggy bank image via Shutterstock.com

THE CONTROVERSIAL LEVY on private pension funds, which was introduced in 2011, will be reduced to 0.15% next year and will be phased out completely in 2016.

Minister for Finance Michael Noonan made the Budget 2015 announcement in the Dáil today, telling the nation that the government will honour its commitment to reducing the 0.75% levy next year.

The original 0.6% charge on private pensions was first introduced in 2011, to fund the government’s Jobs Initiative. An extra levy of 0.15% then brought it to its current level as part of Budget 2014, much to the dismay of private pension providers – and pension holders. This 0.15% rate will remain in place until the end of 2015, Noonan said.

Providers have been noting a significant fall in the uptake of private pensions since its introduction and large numbers of people dropped their plans after the levy was introduced.

During his Budget 2015 announcement, Noonan said that without the pension levy, there would have been no VAT reduction.

He added this would have meant that the “thousands of jobs created in the sector may not have been and the thousands of existing jobs would have been put at risk”.

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