The Early Bird...

In Ireland, 38 per cent of all working adults don’t have a pension. Of those people that don’t have a pension and don’t ever intend on starting one, 65 per cent plan to live off the State pension when they retire*.

These findings are revealed in Zurich’s latest research into pensions in Ireland. This is the second year of this comprehensive research study and highlights the concerns many people have about their future and how they will maintain their standard of living when they retire.

This year, 53 per cent of those surveyed that don’t have a pension, state that lack of spare money is the reason for it. Of those who have no pension, 31 per cent plan to start saving in one to five years, but more worrying is that 42 per cent think it is too late to start a pension at this stage in their lives.

In 2019, 62 per cent of working adults have a pension. They are contributing €220 on average to their pension scheme each month. Of these, less than half are happy with the size of their personal contribution and 76 per cent would like to be able to save more. According to those surveyed, the average annual income needed to lead a normal life in retirement is €26,747.

Longer life expectancy and working lives might lead some to think that retirement is a long way off, but the sooner you start saving the better. The picture of life in retirement is going to look different for everyone, but it’s worth thinking about what lifestyle you would like, how much that will potentially cost and the income you will need to sustain that.

The message is getting out there that there are tax incentives for people saving into a pension. Almost 60 per cent are aware that everyone who makes pension contributions is entitled to tax relief and 55 per cent know that part of their pension funds can be taken tax-free upon retirement. However, 61 per cent admit that they don’t understand how pension savings are invested, which is up 3 per cent on last year’s figures.

Pensions might seem complicated but they don’t have to be. Engaging with a financial adviser is a good starting point. They can help demystify pensions and investments and get you started on a savings journey that will work for you and planned life in retirement.