There were many pressure points in Budget 2011 but pensions – state, public and private – proved particularly contentious. When it came to private pensions, the finance minister and his officials had a difficult balancing act – ensuring people continued to save for retirement while also curtailing the ability of high earners to use generous pension tax relief to reduce their obligation to the exchequer.

In the end, all pensions savers got stung to a certain degree. The decision to no longer allow relief from PRSI and the universal social charge means that whether you pay tax at the higher or standard rate, you are already out of pocket. Very high earners saw saving for retirement become much less attractive – the annual earnings limit on which tax relief can be claimed fell from €150,000 to €115,000 (to put that in perspective this stood north of €275,000 in 2008); the tax-free lump sum on retirement was reduced to €200,000 (this used to be €1.35m) with the next €375,000 taxed at 20% and the remainder at the marginal rate, and the maximum allowable pension fund on retirement for tax purposes was reduced from €5.4m to €2.3m.

Unsurprisingly, the changes drew a lot of criticism from the pensions industry, though it is the plan that tax relief will be reduced to the standard rate for all taxpayers in the future that is causing serious concern, according to Jerry Moriarty, director of policy with the Irish Association of Pension Funds.

"What has been signalled to come would have huge impact on the main bulk of savers who are middle-income earners. If government were to proceed with standard-rate relief there would be little incentive for anyone on the higher rate tax to save for a pension. That would have serious consequences for the state as our population ages," he said.

As it stands, however, and despite all the negative publicity, pension saving is still the best tax break available – the maximum tax-relievable contribution for high earners next year totals €46,000 – but planning is now essential to maximise your pension efficiency. One positive is that pension holders continue to avail of existing reliefs in relation to pension contributions made by their employer, said Tommy Nielsen, director of the Independent Trustee Company. "Contributions may be made by the employer before corporation tax and employees are also not taxed on them. While there are very few commitments not to increase taxation in specific areas, significantly in the domain of pensions relief there is a pledge not to make pension contributions made by the employer subject to benefit-in-kind for the employee. This basically gives certainty to people who continue to plan for retirement with reassurance that they may continue to avail of tax relief," he said.

If you are going to be significantly affected by the changes made in the budget, now is the time to move. There is still time before the end of the year to avail of the more generous tax breaks available this year, said Fionán O'Sullivan, director with IFG Corporate Pensions. "Employees considering making pension contributions personally may wish to consider making such contributions before the end of 2010 in order to avail of the additional PRSI and health levy relief currently available. Employees at retirement age who are entitled to a lump sum in excess of €200,000, and who have not yet taken their benefits, may wish to consider taking benefits before the end of 2010, and may also consider topping-up their pension funds with a further contribution prior to taking benefits," he said.