Children of the 1970’s don’t delay your Pension any longer – Save €100,000 in one hour
Bank of Ireland Life launch Secure Cash Pension Fund with guaranteed 5.25% 12-month return
Launching its annual Pensions campaign today [2nd September 2008] Bank of Ireland Life encourages children of the 1970’s to dedicate just one hour to setting up their pension, and they could save themselves €100,000* in tax.
For those who are worried about investing in a pension during the current period of market uncertainty, Bank of Ireland Life has developed a Secure Cash Pension Fund which offers customers a guaranteed return of 5.25% per annum for 12-months.
In a recent analysis of its personal pension customers, Bank of Ireland Life today revealed that the average age a customer starts their pension is 39. Late-starters are significantly impacted when it comes to their final retirement fund, cutting a potential fund of over €1 million for those who start their pension at age 30, to under €500,000 when starting at age 39.
Key Pension Statistics:
- 71% of people do not understand the tax benefits of a pension (1)
– Tax Relief on your pension payments
– Tax-Free Growth on your pension investment
– Tax-Free Lump Sum on retirement
- 39 years is the average starting age of a Bank of Ireland Life Pension customer (2)
- Just 1 in 2 of workers (55%) have a pension (3)
- 4 out of 5 people without a pension believe that the State pension would not be sufficient if they were to retire this year – State pension €223 per week (4)
- A man retiring at 65 now can expect to live to 85 and a woman retiring at 65 can expect to live to 88 years (5)
In the run-up to the pensions tax deadline of 31st October, the message from the pensions arm of Bank of Ireland is start your pension early – the tax benefits are huge! Appealing in particular to those in their 30’s, the Life Company have developed a customer-friendly pension calculator to help illustrate the tax savings a pension can provide.
Commenting on the launch of Bank of Ireland Life’s Pension Campaign, Stephen Byrne, Head of Pensions said, “The ideal age to start your pension is really when you start your first job, however all too often we put it on the long finger. We hope that by demonstrating the pension-related tax savings of €100,000 plus that can be claimed over a person’s working life, it will prompt those without a pension to find out more.
“Our research has revealed that 71% of people don’t understand the tax relief on pensions. For this reason, we have specialist pension advisers available in every Bank of Ireland branch who are on hand to explain the tax benefits of starting a pension and set-up a plan in just one hour.”
The following table illustrates how just one hour spent setting-up a pension could save someone up to €100,000+ in tax during their working life.
|Start Age||Monthly Pension Payment||Tax Savings||Retirement Fund at age 65||Impact of 5-year Delay on Final Fund|
|30||€500||€222,188||€1,076,217||32% reduction on final fund|
|35||€500||€163,440||€722,781||33% reduction on final fund|
|40||€500||€117,409||€471,931||35% reduction on final fund|
*Calculations are based on a man retiring at age 65, paying income tax at the higher 41% tax rate, assume a 6% investment growth rate and a 5% indexing premium.
“We must all remember that not only is a pension a long-term investment, you get tax relief on the payments you make to your pension too. With this in mind those who are worried about the recent downturn in markets, but have a long time to go before retirement, should consider the great buying opportunity currently available to pension investors. For the more cautious investor the Secure Cash Pension Fund will provide a guaranteed return of 5.25% for 12-months,” concluded Stephen Byrne.
The handy pension calculators are available now in all Bank of Ireland branches and online through the website www.bankofirelandlife.ie.
1 Bank of Ireland Life Market Research 2006
2 Bank of Ireland Life Customer Analysis 2008
3 National Household Survey, Central Statistics Office, Q4-2005
4 Pensions Board Research 2007
5 Pensions Board Research 2007
Note to Editors:
Terms and Conditions of the Secure Cash Pension Fund:
- Standard pension charges apply.
- The guaranteed return of 5.25% for 12-months is provided by the Governor and Company of the Bank of Ireland.
- Following the end of the 12-month period, unless we receive an instruction to the contrary, the proceeds of the Pension Secure Cash Fund will be automatically transferred into the standard Bank of Ireland Life Pension Cash Fund.
- Returns on the Bank of Ireland Life Pension Cash Fund, and other pension funds available from Bank of Ireland Life are variable.
For further information contact:
Public Relations Manager
Bank of Ireland Life
Ph. 01 617 2586
Mob. 086 856 2929
Group Consumer Communications Manager
Bank of Ireland
Ph. 01 604 3750 Mob.
087 226 9324