Pension survey highlights concerns about finances in retirement

Although more people in Ireland have a pension than in previous years, 35% of working adults don’t have a pension and cite not having enough spare money to contribute to one. That is according to key findings from Zurich’s 2022 pension survey*.

Concerns about providing for the future are still high, and nearly half of adults feel it’s too late to start saving for their retirement. Of those never planning to start a pension, 83% plan to live off the State pension – an increase of 9% on 2021.

Since Budget 2023 was announced, the State pension stands at €265.30 per week from January 2023 for those aged 66 and over. But with our ageing population growing at a fast rate, this payment is likely to become less affordable for the government in the decades to come, meaning a personal or company pension could be essential to ensure a good standard of living after retirement.

Pension contributions

When it comes to how much people contribute to their pension, 35% of adults contribute less than €100 a month, and the average monthly payment is €233.

Zurich’s pension research finds that 76% of all adults would like to be able to save more into their pension with €343 being the average extra amount these respondents would like to save.

The research also reveals that 65% are concerned about having enough money for their retirement, and although the majority of people will have their mortgage paid off by the time they retire, there will be some people not mortgage-free by the time they retire.

When asked how much they think they will need to live a normal life after retirement, respondents said they will need around 30K annually. This is an increase of €5,895 (25%) on last year’s figure.

Starting a pension

More than half (55%) think your 20s is the best time to start saving for retirement and 47% believe auto-enrolment could be a good initiative if implemented well.

No one wants to think about getting old and planning for your life in retirement, which could be 30 or 40 years down the road and might seem too far into the future to plan for. But small actions taken today can have great impact in the future.

Benefits and understanding

One of the key benefits of a pension is that part of it can be taken tax-free on retirement. However, 43% of adults say they don’t know how tax relief on their pension works, and only 38% understand how pension savings are invested.

Tax relief is one of the main advantages of saving in a pension and Government tax relief is available on any money you save into your pension. If you’re paying tax on the higher rate, you’re entitled to get a 40% saving on any pension contribution you make.

How much you save into your pension depends on a few things like when you would like to retire, what lifestyle you would like in retirement and how much you can afford to save.  A simple way to check how much you should save is to use our Pension Calculator.

By taking the first steps to starting a pension, you could help make your future brighter. With a wide range of options, control and flexibility, you can choose a pension plan that’s right for you.

With a Zurich pension, you can: save from just €30 per month, keep track of your pension 24/7 and get expert advice when you need it.

If you already have a pension, you can make extra contributions to your existing pension if you want a better income when you retire. Whether you are considering topping up your pension fund or switching your pension provider, with a Zurich pension, you can: maximise your tax relief, invest with an award-winning team** and keep an eye on your pension by logging into our online dashboard.

When it comes to understanding pensions, engaging with a financial advisor is invaluable, talk to a financial advisor and prepare for your future today.

*Zurich pension survey 2022 is a nationally representative survey of 1,000 adults in Ireland, carried out by iReach.

**Investment Provider Excellence Award, Brokers Ireland, 2021; Pension Provider Excellence Award, Brokers Ireland, 2021; Overall Excellence in Financial Service Providers Award, Brokers Ireland, 2021.

The information contained herein is based on Zurich Life’s understanding of current Revenue practice as at 31st October 2022 and may change in the future.