What will you live on in retirement?

Starting, as well as topping up a pension, can ensure comfort in your later life and give you the retirement you’ve always dreamed of. We’ve been asking our audience here at The Journal to rate their knowledge on what it takes to start a pension as well as how to upgrade.

With the help of expert advice from Zurich along the way, we asked questions around financial security, basic knowledge of pensions, tax relief and more. 

Taking our findings, we caught up with Kristen Foran, the National Sales Director with Zurich, to help move the conversation forward when it comes to understanding and getting the most you can as a consumer from the pension you’re investing in. 

A stand out result was the amount of people who rated financial security in their future as being a top priority for them. 8.4/10 readers rated that having a secure financial future is a crucial component of their plans.

In order to highlight the importance of this, Foran says people should ask themselves some important questions.

“Ask yourself some real questions: What will you live on in retirement?  The average weekly wage in Ireland is €907. The current state pension is €277.30per week*. Could you live on this? Currently the PRSI contributions of every four people working pay the state pensions of every 1 person retired. This ratio is rapidly changing and will be closer to the PRSI contributions of one person working will pay for the pension of 1 person retired by 2050. Do you think the country can afford to pay state pensions at the rate they are currently at? If not, what will you do for an income?”

It’s a stark reality, but one that’s important to face. If you haven’t  started a pension there’s no need to panic. Zurich has practical and informative advice that can help you start saving today. Zurich understand that pensions can seem overwhelming, but did you know that from as little as €30 a month you could be saving into your pension and investing in your future? There’s expert advice on hand whenever you  need it, and you can track your pension 24/7. 

For those who already have a pension 4.2/10 readers rated that that they fully understood the process of topping up the pension. We’re breaking down some easy things you can do today, that can help you in the future.

Kristen outlined that doing your research but also getting an advisor can really benefit and help you grow your knowledge.  

“Go online. The  Competition and Consumer Protection commission provide information and useful videos to help consumers understand pensions: www.CCPC.ie. Likewise Revenue have good information at Tax relief for pension contributions (revenue.ie). There is plenty of information and videos on www.zurich.ie. Find an Advisor to help you through the process. There is an Advisor finder tool on the Zurich site to help find an advisor Find a Financial Advisor in Your Region | Zurich Ireland.”

And finally, we’re looking at tax relief. Where your readers confident that they knew everything about tax relief when it comes to pensions? 4.8/10 readers said they were confident that they knew everything there is to know about tax relief and pensions. Let’s be honest, it can be confusing! 

Let’s break it down. A pension is a great way to reduce your tax liability and boost your retirement income. It’s good to know that tax relief on pensions is so generous in Ireland, as Foran outlined to us.

“If you are paying tax at the higher tax rate you get full relief on this** so for every €100 you put into your pension the tax man gives you back €40. In order to claim tax relief backdated to 2022 on a pension contribution paid in 2023, the contribution must be paid, and the backdated tax relief claimed for 2022, in advance of Monday 31 October 2023 or Wednesday 15 November 2023 (if paying and filing online via ROS Revenue MyAccount). If you overpay into a pension and use up all your relief this year you can carry the relief forward on a year by year basis and get it in the future.”

A pension may seem like a daunting  experience for many people, but with the right knowledge to hand –  and a good financial  advisor – it doesn’t have to be. Taking a small action today and speaking to Zurich or a financial broker could have a great impact on your future.

With a wide range of options, control and flexibility, you can choose a pension plan that’s right for you. If you’re wondering where to start, you can find a local financial advisor near you with the Zurich Advisor Finder.

The information contained herein is based on Zurich Life’s understanding of current Revenue practice as at 1st December 2023 and may change in the future.

Source: *Gov.ie

**Subject to income and contribution limits.

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