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Saturday 15 December 2018


Spring Conference

Irish SPA increase had no impact on retirement rate of 65 year olds

Written by Natalie Tuck

The increase of the Irish state pension age from 65 to 66 in 2014 had little impact on the retirement rate of those retiring at the age of 65.

According to research by The Economic and Social Research Institute (ESRI) there is no clear evidence that the change in the pension age impacted the retirement rate of those born after the cut-off point.

The retirement rate among the younger group of 65-year-olds who were born in January and February 1949 was very similar to the retirement rate of the older group born in November and December 1948.

When the state pension age increased, it meant that individuals born after 1st January 1949 could no longer qualify for the pension at age 65. Individuals born before this date could still qualify, provided they had the required social insurance contributions. As a result, 65-year-olds who were born in December 1948 could receive the state pension, while others born in January 1949 (one month younger) had to wait until age 66.

The ESRI concluded that the reasons for the lack of change in the retirement rate was because some of the 65-year-olds who did not qualify for the transition state pension may have been receiving Jobseeker’s Benefit as a type of de facto pension payment until they reached the age of 66.

Furthermore, the existence of occupational pensions could limit the impact of the policy on retirement decisions, as individuals with such incomes could still choose to retire at 65 irrespective of the policy change.

Commenting, ESRI research officer Paul Redmond said: “In the context of population ageing and the rising costs of state pensions, the age at which people retire is increasingly important for public policy. We have not found evidence of people reacting to the policy change in 2014. However, the analysis highlighted the need for improved data that allows us to fully identify an individual’s precise age, social insurance contribution history and private pension income, so that the impacts of future policy changes in this area can be effectively evaluated.”

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