New CCPC research reveals 1 in 5 Irish adults have no financial arrangements in place for retirement

September 20, 2024

• 21% of consumers have no retirement arrangements in place
• 69% expect to own their home outright by retirement while 11% expect to rent
• Two thirds have never spoken to an expert about retirement planning

New research published today by the Competition and Consumer Protection Commission (CCPC) has uncovered critical insights into the state of retirement planning amongst Irish adults.

Significant pensions coverage gap

The findings indicate that while 6 in 10 Irish adults have a pension in place, one in five (21%) have made no financial arrangements at all for their retirement. This increases to 28% for workers aged over 55 years of age. The primary reasons for not having a pension include affordability (30%) and ‘not getting around to it’ (25%) which were cited as the two most significant reasons for not having a pension in place. Older workers are more likely to name affordability as a reason.

Reliance on savings

Over 50% of adults intend to use savings to fund or partially fund their later years, raising concerns that consumers are not fully cashing in on the tax benefits of investing in a pension plan compared to traditional savings.

Employers play crucial role

Employers play a key role in helping consumers to access financial advice and encouraging increased contributions. 70% of consumers would be more willing to increase their pension contributions if matched by the employer. Employers also came through as the most common route to finding a financial advisor, for those consumers who have sought advice on planning for retirement.

Recognition of housing costs into retirement

The research also showed that many consumers recognise that their current housing costs will continue into retirement. While 69% of respondents expect to own their home outright, 11% expect to pay rental costs and a further 6% expect to still be paying a mortgage when they retire.

How much will I get?

Only 39% of consumers are confident that their pension will allow them a good standard of living when they retire, with many consumers uncertain of what to expect. Most consumers (66%) have never had a one-to-one conversation with a financial advisor about retirement.
Commenting on the findings, Grainne Griffin, Director of Communications with the CCPC, said:

“It’s clear that a significant pensions gap still exists, even among workers who are only ten or twenty years away from retirement. We strongly encourage consumers, particularly anyone over 30, who doesn’t have a pension to set one up immediately, even if their contributions are very small. As pension contributions are tax free, the longer term value of even a very small regular contribution will be surprising. We are encouraging all Irish consumers to prioritise their pension planning, seek financial advice and regularly review their retirement plans to secure and future-proof their financial wellbeing.
There is a very clear opportunity here for employers to demonstrate their commitment to their employees’ financial wellbeing, now and into the future. For those consumers who have sat down with a financial advisor and had that crucial conversation about retirement planning, we know they are most likely to have been connected to that financial advisor by their employer.
We also know that where employers offer to match higher pension contributions, it makes employees much more likely to increase their level of investment in their pension. With pensions subject to less tax than wages, savvy employers could opt to invest in their workforce by boosting pension contributions rather than salaries, and reducing their employees overall tax liability.”

The CCPC has lots of useful information and resources to help consumers understand and navigate their retirement planning. For more, please visit CCPC Pensions.

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