By STAFF REPORTER…
After decades of disciplined saving, Irish expats are waking up to a hard truth that their pensions aren’t working for them. Locked into restrictive rules and limited access, many are now breaking free, taking charge of their retirement savings by reviewing, restructuring, and relocating their pensions for greater flexibility and control across borders.
Advisers at deVere, which has more than 100,000 expat clients globally, report a steady rise in enquiries from Irish nationals who have spent part of their careers overseas and are now questioning whether their home-country pensions still suit their retirement goals.
“Ireland’s pension regime is generous while you’re saving, but restrictive once you reach retirement,” says Luke Handley, Executive Wealth Manager at deVere.
“People spend 30 or 40 years building up a pension pot, only to discover at the end that they can’t access it freely or adapt it to how their lives have changed. Once funds move into an Approved Retirement Fund, options become limited, drawdowns are compulsory, and flexibility is largely gone. “It’s why we’re seeing Irish clients taking action earlier.” James Green, Director of deVere Europe, says this shift reflects a broader change in financial thinking among internationally mobile individuals.
“We’re seeing more Irish clients abroad take a hard look at how their pensions fit into their wider financial lives,” he explains. “It’s not just about where they live today, but where their money needs to work tomorrow. People want control, not constraints, and they’re willing to review long-held arrangements to achieve that.”
A system under pressure
Ireland’s pension framework remains one of the most structured in Europe. The Standard Fund Threshold (SFT) is €2 million in 2025, rising in phases from 2026, with a 40% charge on any excess. Retirement lump sums are subject to a lifetime tax-free limit of €200,000, with the next €300,000 taxed at 20%, and any amount above €500,000 taxed at 40%.
For Approved Retirement Funds (ARFs) and vested PRSAs, minimum annual withdrawals apply from age 61 — 4% annually, increasing to 5% from age 71, and 6% where total ARFs exceed €2 million.
One of the biggest misconceptions, Handley says, is around when and how those withdrawals actually begin.
“Many people think they can take their lump sum at retirement and leave the rest untouched until they’re ready,” he explains. “But that’s not how the system works. The moment you access any part of your pension — even just the lump sum — you’ve crystallised the benefits, and the remaining funds automatically move into an ARF. From that point, you’re subject to mandatory income withdrawals, typically from 61 onwards.”
This is what catches many people by surprise. “It means that even if you plan to keep working past 61, or simply don’t need the income yet, you’re still required to draw down and pay tax on that income,” Handley adds. “There’s no real flexibility once you’ve triggered the process. On the other hand, if you want to access your pension early, that’s usually not possible either — most occupational schemes lock access until age 60.”
The combination, he says, can leave people feeling trapped. “You’re restricted on both sides,” he says. “You can’t take it early when you might need it, and once you do take it, you lose control over when and how the income comes out.”
It’s a pattern Handley sees frequently with Irish professionals who have multiple pensions built up over their careers.“A lot of people have older schemes sitting untouched — sometimes with different employers, sometimes mixed between personal and occupational plans,” he explains. “Now that they’re approaching drawdown, they’re realising how fragmented and restrictive the system really is. Understanding exactly how each scheme will pay out is essential before making decisions that can’t be reversed.”
By contrast, internationally regulated pension structures offer far greater flexibility
“Under an EU-based framework, members can often take a larger lump sum — up to 30 percent depending on structure — without being forced into immediate drawdowns,” Handley says. “If you want early access, you can. If you’d prefer to keep working and let your funds grow, you can do that too — all while maintaining tax efficiency. It gives clients control over timing, currency, and income, rather than being dictated by rigid domestic rules.”
Green agrees that this structural mismatch is driving the change in behaviour. “Employers and governments built pension systems around fixed careers and predictable lifespans,” he says.
“Today people are typically more mobile, entrepreneurial, and global. They want personal control over when and how they draw income, rather than being bound by outdated limits.”
Beyond access, consolidation has become another key motivator
“Bringing multiple pensions together under one structure makes a huge difference,” Handley says. “You gain oversight, consistent investment management, and the ability to align all your assets with your broader retirement goals. For many, that sense of clarity and control — plus the enhanced lump-sum access — is the real appeal.”
Seeking control and currency flexibility
For Irish clients living or planning to retire abroad, currency flexibility has become another major concern. Those who remain in euro-denominated pension schemes often face unwanted exchange-rate risk if their lifestyle costs are in sterling, dollars, or another currency.
“Most of my Irish clients abroad still think in euros and plan to retire in Europe,” says Handley. “But they want their pensions to work seamlessly across borders, to be able to draw in the right currency, on their own schedule, without unnecessary tax drag.”
Internationally regulated pension structures are increasingly appealing to such clients. These solutions can provide broader investment choice, multi-currency flexibility, and earlier access — benefits typically unavailable under domestic Irish arrangements. Members can start drawing benefits from age 50, are not obliged to take income each year, and can hold assets through independent trustees for added protection.
Planning for the next generation
Beyond flexibility and access, legacy planning has become a key motivator. Under Irish rules, Capital Acquisitions Tax (CAT) can claim up to 33% of inherited pension value above thresholds.
“One of the most overlooked advantages of international structures is how efficiently wealth can pass to loved ones,” Handley says.
“It’s about ensuring that what you’ve worked for benefits you, your family, not the taxman.”
For families with assets or beneficiaries overseas, managing inheritance exposure can be particularly complex. Structuring pensions in regulated international environments can help reduce unnecessary friction and ensure that wealth transitions are smooth, compliant, and efficient.
A new mindset
Both stress that this is not a reactionary trend but a sign of growing financial maturity among Irish professionals abroad. “The idea of waiting until retirement to think about how you’ll take your income just doesn’t make sense anymore,” says Handley.“People are recognising that flexibility is worth planning for early.”
Green agrees: “We’re entering an era where retirement planning isn’t confined by borders. Irish clients are realising that financial freedom and control go hand in hand.”
Preparation, not panic
For Irish nationals with multiple pension pots, perhaps from different employers or a mix of personal and occupational schemes, reviewing how those assets fit together is now a vital part of retirement planning.
For more information, please contact Luke Handley, Executive Wealth Manager: luke.handley@devere-portugal.pt
“It’s about preparation, not panic,” Handley concludes. “Exploring your options costs nothing, but ignoring them could be expensive.”
