The Irish arm of UK life and pensions group Royal London has decided to enter the Irish personal retirement savings account (PRSA) market, one of the fastest-growing areas of the pensions market in recent times.
Royal London Ireland chief executive Noel Freeley said the move illustrated the company’s “long-term commitment to the Irish broker market”, after entering Irish pensions with its approved retirement fund and personal retirement bond offering.
The PRSA market, established in 2002 as a type of flexible long-term personal pension plan, has grown sharply in popularity in recent years, amid efforts by the government and Pensions Authority to encourage business owners to move away from single-member executive pension schemes.
The government used the Finance Act 2022 to remove the benefit-in-kind (BIK) treatment of employer contributions to employees’ plans. BIK is ordinarily treated as taxable income.
However, the Finance Bill 2025, signed into law earlier this month, has placed a limit on employer contributions from a BIK-exemption perspective to 100 per cent of income drawn from the business in the same year.
The PRSA market in Ireland, which was comprised of seven main firms, including Irish Life, Aviva and Standard Life before Royal London entered the fray, saw annual premium equivalent contributions reach €400 million in 2023, up from €149 million in 2022.
Royal London, the first big life and pensions firm to enter this segment of the market in about a decade, estimates the market will grow even more strongly this year. Financial advisers had warned business owners to use a short window between the unveiling of Budget 2025 in early October and the Finance Act was signed into law on November 12th, to up contributions to maximise tax-efficient payments.
Still, financial advisers say the PRSA is expected to remain attractive to executives and business owners even after the move to cap the tax benefits of contributions.
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