Irish workers with occupational pension coverage receive around twice the retirement income of those without workplace pensions, according to new research from the Economic and Social Research Institute (ESRI).

The research, presented at the annual Budget Perspectives conference today, 23 June, showed that people with occupational pension coverage have a median weekly retirement income of approximately €460, compared to €230 for those without coverage.

ESRI said the difference is “driven almost entirely” by occupational pension income, as state pensions and benefits are similar across both groups.

The institute also found that the gender pension gap is largely driven by occupational pension coverage, with men and women without workplace pensions receiving similar weekly incomes.

However, despite the significant income gap, the research found little difference in retirement timing, with workers both with and without occupational pension coverage leaving the workforce at an average age of around 61.

This was despite workers with occupational pensions expecting to retire earlier, at around age 63.5, compared with close to the state pension age of 66 for those without workplace pension coverage.

ESRI highlighted that the gap between planned and actual retirement age is particularly pronounced among women without occupational pension coverage, who retire on average at around 58.5, despite planning to retire closer to 66.

ESRI research officer and report author, Dr Dora Tuda, said: “While most employees retire earlier than they plan, those without occupational pension coverage face the greatest financial challenges.

"They not only retire earlier than expected but do so with significantly lower incomes, raising concerns about financial security in older age, especially for women.”

Furthermore, ESRI research assistant and report author, Siddhant Seth, added: “As Ireland rolls out automatic enrolment, expanding occupational pension coverage will be key to improving income adequacy in retirement, even if it might not substantially change the average retirement age.

This research highlights the importance of continued monitoring to assess whether expanded pension coverage improves retirement outcomes and reduces gender inequalities.”

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