At Lynx Financial Services, we often speak with clients who want to do more with their pension but aren’t sure where to start. One option worth exploring is an AVC (Additional Voluntary Contribution). An AVC is an additional payment you make into your pension, on top of any regular contributions from you or your employer. It’s a flexible, tax-efficient way to increase your retirement fund and take more control of your financial future. You can make AVCs regularly or as a one-off lump sum. Either way, it’s your choice and you decide the amount and the timing.

What Are the Benefits?

AVCs allow you to:

  • Save more for your future in a structured and efficient way.
  • Maximise available Tax Relief, reducing the cost of saving.
  • Take advantage of investment growth within your pension.
  • Increase your available tax-free lump sum at retirement (subject to limits).
  • Increase your annual income in retirement.

How Much Value Can AVCs Add?

The earlier you start, the more your AVC has the potential to grow. Even small amounts build over time thanks to something called compound interest. In plain terms, compound interest means your money earns returns and those returns also earn returns. Add in tax relief, and the effect becomes even stronger. The longer your AVC is invested, the more this growth can build up.

Starting early gives your contributions more time to work in your favour, but even later in life, an AVC can still make a meaningful difference to your pension fund.

Here’s an example of what saving €100 a month until age 65 might look like:

Starting Age

 Projected Value at 65 Cost To You Tax Relief Investment Return

55

€18,464

€7,200

€4,800

€6,464

45

€41,245

€14,400

€9,600

€17,245
35 €77,430 €21,600 €14,400

€41,430

Figures based being a 40% tax payer with a projected investment return of 5% p/a, less 1.25% p/a charges in an ESMA 4 rated fund. While early action helps, AVCs can still make sense later in life. Every contribution counts.

The Tax Advantage

Every year, we are bombarded with information on items that we should / can or have yet to claim or declare. It can be a bit of a maze to try and navigate but we find that the main points below will highlight the tax reliefs and claims that can be most commonly made before the deadline (31st October if filing manually or November 19th if filing online).

Illustration and Painting

Double Your Wins

Ok, it’s not exactly doubling your wins, but making an Additional Voluntary Contribution (AVC) at this time of year has a dual benefit. You can claim tax relief and you’re building a nest egg for the future (which will benefit from compound interest until you’re ready to draw down the pension).

Income tax relief is currently available at your marginal rate as follows:

 

AVC Contributed

 Rate of Income Tax Reduction in Take Home Pay 

€1,000.00

 20%

€800.00
€1,000.00 40%

€600.00
There are limits on the amount of AVCs (together with any normal pension contributions) you can pay as follows:
Under age 30 15% of Remuneration
Age 30 to 39 20% of Remuneration
Age 40 to 49  25% of Remuneration
Age 50 to 54 30% of Remuneration
Age 55 to 59 35% of Remuneration
Age 60 and over 40% of Remuneration

Gareth covered AVCs in a recent video which you can watch here or below.

Should I Make a Regular or Lump Sum AVC?

There’s no one-size-fits-all answer. It depends on your income, goals and timeline.

Regular AVCs

  • Help you build gradually over time.
  • Fit into your monthly budget.
  • Provide steady growth and tax relief at source.

Lump Sum AVCs:

  • Useful if you have a bonus, inheritance or savings.
  • Can boost your fund quickly, especially closer to retirement.
  • May still be eligible for tax relief, depending on timing and limits.

You can do both if it suits your situation.

How to Make an AVC

AVCs are usually arranged through your pension provider or payroll department. At Lynx, we help clients:

  • Work out what they can afford.
  • Understand their current pension position.
  • Claim the correct level of tax relief.
  • Decide on the right mix of regular or lump sum contributions.

If making a one-off AVC, you may need to submit documentation to Revenue such as a pension tax certificate or contribution form. You should also make sure you’re eligible for tax relief and meet Revenue’s deadlines. For PAYE employees not using ROS, the deadline is 31 October 2025. For those filing online via ROS, the deadline is 19th November 2025.

The Power of AVCs

AVCs can be a powerful way to increase your pension for the future and reduce your tax liability in the present. Whether you’re just starting out or getting close to retirement, they give you more flexibility and control.

At Lynx Financial Services, we help individuals across Ireland understand their pension options, navigate tax rules and make informed decisions for their future.

Planning for Today, Tomorrow and the Unexpected

At Lynx Financial Services, we believe financial planning shouldn’t be complicated or overwhelming. That’s why we take a personalised, straightforward approach, helping you save for today, tomorrow and the unexpected.

No jargon. No hidden fees. Just clear, honest advice tailored to your goals.

Whether you’re looking to grow your investments, plan for retirement, protect your family or secure the right mortgage our expert advisors are here to guide you every step of the way. Your financial security is our priority and as a member of Brokers Ireland regulated by the Central Bank of Ireland you can trust that you’re in safe hands.

Wherever you are in life, whatever your financial ambitions – we’re here to help.

📩 Ready to talk pensions? Get in touch for a no-obligation chat.

Warning: If you invest in these products you may lose some or all of the money you invest.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up.
Warning: Benefits may be affected by changes in currency exchange rates.