Pension changes in 2027: everything you need to know 

Understanding the various changes to pensions in 2027, whether it’s a personal, occupational, or State pension, can be difficult. With this guide, we want to make it easy for you to understand what is changing and what it means to you.  

Zurich has been meeting the financial needs of people in Ireland for over 40 years. Our award-winning₁ investment team, in Dublin, is responsible for funds under management of approximately €52.3 billion, of which pension assets amount to €44.2 billion₂.  

Table of contents:  

1. Contributory State pension increase
2. My Future Fund and it's impact
3. Standard Fund Threshold (SFT) increase
4. Pay Related Social Insurance (PRSI) contribution increases  

Contributory State pension increase

From 1^st January 2027, the State pension (contributory) personal rate will increase by €10 per week from €299.30 to €309.30 per week (assuming at least 2080 full rate contributions were made to obtain the maximum rate)₃. Ancillary social welfare rates were also increased in Budget 2027.  

Since 1^st January 2024, people born after 1^st January 1958 can choose when they would like to begin receiving their State pension (contributory) at any age between 66 and 70. For people born before 1st January 1958, the State pension age remains 66. This change was highlighted in a previous article we wrote about how the State pension is becoming more flexible.  

In essence, these changes aim to provide people with more choices and potentially increase their State pension payments when they retire. It also means that for people who started working later in life, they will now be able to work longer in order to qualify for the State pension.  

The table below shows the contributory pension increases between 2026 and 2027₄

My Future Fund and it's impact

Ireland’s long-awaited auto-enrolment (AE) pension system is no longer a policy concept, it’s a day-to-day reality for employers and employees. Its headline goal is simple: to increase retirement saving across the workforce.

But beneath that simplicity lies a reform that is already changing employer behaviour, reshaping employee expectations, and redefining the role of financial advice in the corporate pension space.

The heart of the AE story is not just what we know so far, but some additional elements such as transferability and additional contributions, that are still to be finalised - and how these will ultimately shape Ireland’s long-term retirement landscape.

The AE framework is built around one core idea: remove inertia as a barrier to retirement saving. Eligible employees were automatically enrolled into My Future Fund, via a three-way contribution model:

• Employee contributions
• Employer contributions
• A State top-up

The structure is deliberately standardised. Contribution rates are fixed and applied to gross salary, up to a cap of €80,000. Investment options are streamlined to make decision making easier for members entering the system for the first time.

A defining feature is the State top-up. For every €3 an employee contributes, the State will contribute €1. For those in AE, this mechanism replaces traditional marginal rate tax relief and is intended to be easy to understand and clearly visible on members’ statements.

Contribution rates will not remain static though. They will step up in phases, with scheduled increases in 2029, 2032 and 2035. Each of these milestones is likely to act as a market “shock point”, triggering shifts in behaviour among employers, employees and providers.

Early evidence points to strong growth in existing pension scheme membership, particularly within master trust structures, reflecting both increased awareness and the mandatory requirement to save for retirement.  However, not all cohorts are reacting in the same way. Higher-rate taxpayers continue to favour traditional occupational pension schemes and PRSAs (Personal Retirement Savings Account), where marginal tax relief remains a powerful incentive.

This is creating the early outlines of a two-tier system, distinguished by:

• Income level
• Tax treatment
• Perceived value of State top-up vs tax relief

Understanding these dynamics will be critical for employers as they shape their benefit strategies.

For employers, AE is not just an operational requirement; it is also a strategic issue. The framework introduced minimum employer contribution standards that existing pension arrangements must meet from December 2025 onwards. While many schemes were already above these minimums, the real test will come as mandatory contribution levels rise over time - the next one approaching in 2029.

Employers will need to ensure that:

• Current scheme designs either meet or exceed AE requirements at each future milestone.
• Cost projections and budgets incorporate these scheduled increases.
• Benefit structures remain competitive and coherent as employee expectations evolve

In practical terms, employers have a relatively narrow planning window, roughly 2.5 to 5.5 years,  to future-proof their pension offerings. Treating this as a once-off compliance exercise is risky; the more sustainable approach is to build in flexibility that can accommodate further regulatory or market change.

• If you are an employee visit our auto enrolment for employees page to learn more.
• If you are an employer visit our auto enrolment for employers page to learn more.  

Standard Fund Threshold increase 2027 

As previously legislated, the SFT increases from €2.2 million to €2.4 million from 1st January 2027, rising to €2.6 million in 2028 and €2.8 million in 2029, after which it will be indexed to wage inflation.

Budget 2027 confirms that Finance (No. 2) Bill 2026 will revise the age-related valuation factors used to calculate Defined Benefit (DB) pension benefits for Standard Fund Threshold (SFT) purposes from 1st January 2027. The revised factors are expected to reduce the capital value attributed to many DB pensions when tested against the SFT, although the final factors will not be confirmed until publication of the Finance Bill.

PRSI contribution increases  

The PRSI (Pay Related Social Insurance) contribution increased in Ireland in 2026. In October 2025 they rose by 0.1% and rose again on 1st October 2026 by 0.15%. This means that by 2027, employees, employers, and self-employed individuals will be paying higher PRSI contributions₆.

So, what does this mean for you?

• If you work in Ireland, your PRSI deductions from your salary will increase.
• Employers will also pay higher PRSI on wages.
• The change aims to support the sustainability of Ireland’s Social Insurance Fund, which finances state pensions and other social welfare benefits.

As part of the Governments PRSI roadmap, there will be incremental increases in all classes of PRSI (employer, employee and self-employed) over the coming years₇. They are as follows:

• 2025: 0.1%
• 2026: 0.15%
• 2027: 0.15%
• 2028: 0.2%

For more information and changes introduced in Budget 2027 you can read our article that looks at some of the changes and updates to pensions, auto-enrolment, savings and tax. 

The information contained herein is based on Zurich Life’s understanding of current Revenue and Dept of Social Protection practice  and may change in the future.

Sources: 

₁Investment Excellence Award, Brokers Ireland, 2014 - 2025. Pension Provider Excellence Award, Brokers Ireland, 2014 - 2025. No awards held in 2020. Fund Management Company of the Year 2025 Award, Business and Finance Financial Services Awards. Pensions and Life Assurance Company of the Year, Chambers Ireland Awards, 2026.

₂Zurich as at 30th June 2026. 

₃Gov.ie: Social welfare increases    

₄Citizens Information: Social welfare rates announced in Budget 2027

₆Citizens Information: Paying social insurance (PRSI)

₇Gov.ie: Government PRSI increases