Eight in 10 Irish with a pension 'not confident' of having sufficient income in retirement
Written by Natalie Tuck
Eight in 10 Irish citizens with a pension are not confident that they will have enough income to fund their retirement, according to Friends First.
The annual survey, also revealed that almost half (47 per cent) of Irish people do not have a pension.
Of those who do not have a pension only four in 10 see getting a pension as a priority and while this is growing, one in six still rule it out.
Of those without a pension, almost eight in 10 (78 per cent) are not confident of having sufficient income when they retire and only three in 10 believe they could comfortably live on the current state pension.
Friends First pensions & investments director Simon Hoffman said:“The term ‘pensions time bomb’ has been around for quite some time, but it has never been more relevant and appropriate to use than now. There has been very little movement in terms of pension ownership over the past number of years, despite many organisations advocating for it. In fact this research, which we have undertaken at Friends First for the past ten years, shows very little change in penetration levels and so it seems that people are just not prioritising it. I would encourage people to take action to secure their financial future.”
The research also revealed that only a little over half (56 per cent) expect to be mortgage free when they retire, with 9 per cent saying they would be mortgage free about five years after they retire. Thirteen per cent reported that they currently rent and would continue to do so and the remaining 17 per cent responded that they didn’t know.
Hoffman continued: “Looking back, I think there has always been a realistic ambition, for most people, to be mortgage free when they retire. We assumed that if we worked hard, we would have a retirement free from the shackles of a mortgage or other financial concerns. However the stark reality is that almost half will have to continue to pay a mortgage when they retire and they need to act now to ensure they can continue to make those payments. In order to do so people need take more control, to understand their financial commitments post retirement, and to start funding it now”.
The survey also asked respondents about their thoughts on what they would do with their lump sum when they retired. For those who have yet to retire, and who have a pension, 73 per cent said they will draw down their lump sum and 43 per cent of these think that they would spend it on a holiday/travel. Eighteen per cent said they would carry out home improvements and the same amount (18 per cent) said they will buy or upgrade their car.
However, interestingly, for those who have retired and drawn down their lump sum the figures are flipped with 36 per cent carrying out home improvements and 21 per cent going on holiday/travel.