Are you pension ready??

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In today’s Irish times:

No matter what stage you are at in life, it’s never too late or early to start saving for your pension.

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.

Despite this, many people feel that the sooner they begin saving for retirement, the better, with 81 per cent convinced that you should be no later than in your 30s when you start saving into a pension.

This year, 53 per cent of those surveyed that don’t have a pension, point out 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. More than half of all respondents think the best age to start saving for retirement is in your 20s.

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.

Jonathan Daly, head of retail distribution and propositions at Zurich Life Assurance
Jonathan Daly, head of retail distribution and propositions at Zurich Life Assurance

Commenting on the research, Jonathan Daly, Head of Retail Distribution and Propositions at Zurich Life says: “The findings of this year’s pension research show that little has changed in a year and there is still a serious shortfall in the number of working adults who have or plan to start a pension. The number of people who plan to rely on the State pension is also concerning as they need to consider if it will be enough to live off by the time they retire, which could be in 30 or 40 years from now.
Daly says another worrying trend highlighted in the research is that people are despondent when it comes to pension planning and feel that it’s too late to start saving.

“Obviously early planning and consistent pension saving are the best ways to prepare for retirement. However, it’s never too late to start,” he says.

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.