THE COMPETITION AND Consumer Protection Commission (CCPC) has published research showing that a high proportion of Irish adults don’t have a plan for how they will fund their retirement.
Of the 735 adults who took part in the research in July, almost a quarter (23%) of those in the 55-64 years age group, most of whom would likely retire in the next decade, said they don’t currently have a pension in place.
77% of this age cohort expect to qualify for the State Contributory pension as one way of funding their retirement.
Two thirds (66%) of all respondents stated they would be using the State Contributory pension to help fund their retirement, however 32% of those questioned were unaware of the amount of the State Contributory pension payment (currently €253.30 per week).
Many respondents intend to supplement their pension plans with a variety of other forms of retirement funding, including, selling a property (24%), rental income (23%), equity release (15%) and selling a business (14%).
The research also found that 38% of adults surveyed have no pension plan in place.
One third of those aged 25-34 expect to use funds from the sale of a property or income from a rental property as a source of funding in retirement.
Another option would be to continue working after the current pension age of 66.
Under pension proposals going to Cabinet today, people who want to work longer can do so, and as a result will get a higher pension of about 5% each year they work after retirement age.
This approach would let people continue working if they wish, but would also allow people who have not built up enough PRSI contributions for a full pension to carry on working in order to reach it.
Kevin O’Brien, a member of the CCPC, said:
“This research suggests a lack of provision for adequate retirement income among a considerable cohort of Irish adults. It raises concerns therefore around the long-term financial well-being of consumers.”
“Two thirds of consumers surveyed indicated that they would be willing to pay automatic contributions into a compulsory pension scheme.”
“This is positive news with pension auto-enrolment set to be introduced to Ireland in 2024, which will see employees automatically enrolled in a workplace pension scheme which will be co-funded by their employer and the State.”
O’Brien also highlighted that many people will not have provisions in place to provide for a secure retirement.
Among those without a pension plan, 32% stated that they have yet to get around to it, 20% feel they are too young and a further 20% don’t feel they can afford it.
Social Protection Minister Heather Humphreys is to seek Cabinet approval today for the pension age to remain at 66.
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