Ireland’s population is growing, living longer and getting older. The number of people over 65 will jump from 1:8 to 1:6 by 2030 and the number of people over 85 will double. These demographics have considerable implications for the State and its ability to finance the State pension and other social spending.
According to the National Risk Assessment 2019 report launched in August, the number of people eligible for the State pension will leap from 0.6 million at present to 1.4 million by 2055, while the ratio of workers to those in receipt of the State pension will more than halve to just 2.3:1.1
Only one in three people in the private sector have their own pension fund. Will those without a private pension be able to support themselves in retirement on just the State pension?
Will the State be able to continue to maintain the value of the pension adjusting for inflation?
Aviva conducted an in-depth pension research and analysis seeking to establish how well people are prepared for such possible outcomes. Polling was conducted by RED C based on a representative sample of 2,000 adults aged 18+ in July 2019
The survey reveals a general lack of engagement with retirement planning by a significant proportion of the Irish public and evidence of a gender pension gap.
Key findings include: 43% of people with a private pension have no idea how much their pension fund is worth; more than 50% have no idea what their pension fund is invested in or are aware of the tax benefits available for pension savers.
Almost 50% are worried about the adequacy of their retirement planning compared to 32% who are not. Yet when asked what their expected financial position will be at retirement age, 60% say they will either be comfortable or ok. The reality is that for 35% of them their financial position will be tight or struggling.
With the pensions’ time-bomb ticking and the age profile of the country rising, we all need to become more aware of the importance of a long-term savings and financial planning culture from an early age.