New survey reveals 71% of people don't understand the tax relief on pensions

- 60% of people with no pension claim they can afford one

In a new survey issued today, Monday 25th September, by Bank of Ireland Life to coincide with the launch of their annual pensions campaign, it was revealed that 71% of the population do not understand the tax benefits associated with a pension. Since almost half of the working population don't have a pension plan in place, this new finding will be hugely significant to the Government who are currently trying to tackle the country's pension crisis.

However on a more positive note, the research shows that 60% of people without a pension claim they can actually afford to contribute to one every month, even though they had not started one as yet.

Commenting on the research findings, Brian Sullivan, Head of Pension Sales, Bank of Ireland Life said; "It appears that awareness of the pension tax benefits is now the main barrier to pension take-up and not affordability as previously thought. Over 1.2 million people in this country took out an SSIA, which offered a 25% Government bonus, yet a pension can offer almost double this incentive through tax relief. There are specialist pension advisers in every Bank of Ireland branch who can explain the tax relief available simply, and set-up a pension in just one meeting."

Brian Sullivan continues, "The best advice I can offer people who can afford to pay into a pension today, is not to put it off any longer. Starting a pension early with small contributions at the outset and then gradually building these up, can make a huge difference to the size of your pension fund in the long run. In fact, delaying by just 5 years could reduce your retirement fund by almost a third. And you'd be surprised, your salary may increase as you get older but your cashflow will actually lessen as increased personal and financial responsibilities place a much bigger demand on your disposable cash."

Additional findings also revealed:

"We believe that a greater majority of people will be able to make monthly payments of €300 - €500 into their pension once the SSIA scheme finishes. Afterall, many people don't realise that a monthly contribution of €488 by a working person on the higher rate of tax would only cost €254, the maximum SSIA payment," added Brian Sullivan.

The tax benefits of starting a pension are particularly relevant to the self-employed, who must file their annual tax returns before the 31st October this year. Previous research conducted by Bank of Ireland Life, indicated that just one third of the self-employed contributed to a pension. This is very worrying especially when you consider that the number of small business owners in Ireland has increased by over 68% in the last four years alone and accounts for over 10% of the working population. The self-assessment tax deadline of 31st October provides sole traders with the opportunity to cut their annual tax bill by nearly half (42% for those on the higher tax rate) if they contribute to a pension.

Brian Sullivan concluded: "Some of the biggest worries facing the self-employed include managing their time and finances, the day-to-day running of their business, developing their product or service, and most importantly, getting a steady stream of sales. When you factor in all these concerns, quite often pension provision can fall to the bottom of the pile. Furthermore, many business owners see their business as their pension and so don't take out separate cover. However, few stop to think of the dangers inherent in relying on your business as your pension. Since we now know that most people don't understand the tax benefits of taking out a pension, we will be actively encouraging all those who are self-employed to start a pension and cut their tax bill before this year's 31st October tax deadline."

As part of their annual pensions campaign, Bank of Ireland Life has also launched a free guide for theself-employedcalledTaking the Tension out of Pensions, which is available in every Bank of Ireland branch or by calling 1890 365 665*.

* To monitor the quality of service calls may be recorded.

The Cost of Delay: If you put off your pension by just five years, it could reduce your pension fund by almost a third.

NOTE:Figures quoted are for illustration purposes only and are not guaranteed. These figures are based on a contribution of €200 per month increasing by 3% each year. Investment growth of 6% p.a. is assumed. Actual investment growth will depend on the performance of the underlying investments and may be more or less than illustrated. All figures are based on Bank of Ireland Life's Standard PRSA.

Warning:These figures are estimates only. They are not a reliable guide to the future performance of this investment.

Warning:The value of your investment may go down as well as up.

For further information contact:

Sharon McDonnell
Group Consumer Communications Manager
Bank of Ireland
Tel:01 604 3750
Mob:087 226 9324

Laura Erskine
Public Relations Manager
Bank of Ireland Life
Tel:01 6172586
Mob:086 8562929

Bank of Ireland Life is a trading name of New Ireland Assurance Company plc. Bank of Ireland and Bank of Ireland Insurance & Investments Limited are tied agents of New Ireland Assurance Company plc. New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Financial Regulator. Member of Bank of Ireland Group. Bank of Ireland Insurance & Investments Limited is regulated by the Financial Regulator. Bank of Ireland is regulated by the Financial Regulator.