Mr. Aidan McLoughlin:

One could end up paying more tax. On the other hand, if one is on a very low income, if one put in the contribution when one had a very high income, one might have paid at the top rate and it came out at a lower rate. It is a function of the amount of income one has that the State is giving the relief, not the fact that it is a pension in itself. The tax reliefs attached to the pension schemes are mainly tax deferral. Everything that comes out is taxed unless it comes out of the tax-free lump sum.