The Standard Fund Threshold (SFT)

The Standard Fund Threshold (SFT) is the most your pension fund can be worth before extra tax applies when you draw it down. Go over it, and the excess is hit with a 40% "chargeable excess tax," on top of whatever else you owe.

The basics

Current limit. €2.2 million for 2026, up from €2.0 million in 2025. It rises by €200,000 a year until it reaches €2.8 million in 2029.

What counts. The SFT applies to the combined value of every pension pot you hold when you access it, not just one scheme. Occupational pension, PRSA, personal pension: they all count toward the same limit.

The 40% rate. Whatever's over the threshold is taxed at 40%, ring-fenced from the usual reliefs and allowances. Tax already paid on the retirement lump sum can offset part of the bill.

Why the number keeps changing

The SFT sat frozen at €2 million for over a decade. Budget 2025 announced a phased rise instead: €200,000 a year from 2026 through 2029. After that, Revenue's stated intention is to index the SFT to wage growth each year, so it stops eroding in real terms the way it did before.

Cisti's pension growth chart assumes a flat 2% a year for that post-2029 growth. Treat it as a placeholder, not a forecast. Nobody knows what average earnings growth will actually look like a decade out.

A worked example

Say your combined pension funds are worth €2.5 million the year you retire, and that year's SFT is €2.4 million. The excess is €100,000. At 40%, that's €40,000 in chargeable excess tax, on top of any tax due on the rest of the fund as you draw it down.

How Cisti shows this

The pension growth chart plots a dashed threshold line next to your account balances. Once your total crosses €1 million, a separate callout on the Pensions page shows exactly how close you are to that year's threshold.

This information is for educational purposes only and does not constitute financial, tax, or legal advice. Tax rules change annually. Always verify current rates and thresholds on Revenue.ie. For personalised advice, consult a qualified financial advisor.