Half of Irish people between the ages of 30-45 have not started to save for their pension – according to a survey by Bank of Ireland
Almost 80% of people surveyed would pursue further education in their retirement
Four fifths of those surveyed would like to retire early
16 September 2013. Half of Irish people between the ages of 30-45 have not started to save for their pension – despite many of them being concerned about their finances, according to a new survey undertaken by Bank of Ireland Life. The survey, which was undertaken by Red C on behalf of Bank of Ireland Life, has found that 95%of people said if they could retire in the morning they would spend more time travelling. Almost 80% said they would study something new while 60% said they would hope to take up a new sport. 98% said they would do more things with their partner.
- 50% of Irish people aged 30-45 have not yet started saving for their retirement, despite 39% being concerned about having a sufficient income to do all the things they would like to when they retire
- Irish people aged 30-45 spend a monthly average of €304 on food costs, €235 on utility bills and €102 on their savings/ pensions
- For those with a pension fund, 80% have taken out their pension through their employer
- On average, 30-45 year olds think they could afford to contribute €90 a month to a pension. This rises to €115 among those who currently have a pension
- 75% of 30-45 year olds are not confident they could retire on the current State pension, with six in ten currently expecting to have alternative funding options
- One in two of those surveyed expect to be stretched financially during retirement
According to Bernard Walsh, Head of Pensions, Bank of Ireland Life : ” Consumers should think of their pension as a savings plan for their retirement. In planning for it, the best approach is to consider how much you will need to fund your retirement. It’s about having a goal for the type of retirement you want, working out how much you will need to achieve that goal and putting a plan in place that will show you how much you need to save and when you need to start. You should also remember that there are currently very attractive tax benefits to saving for a retirement fund. A pension adviser can help you work all this out”
85% of people said they worried about not having enough savings to do all the things they want to do in retirement with 84% of people concerned about being able to meet medical bills and supporting themselves through retirement. 78% believed they may have to continue to work for more years than the State retirement age because they wouldn’t be able to afford not to do so. Around 27% of people worry that retirement would prove challenging in adjusting to spending more time with their partners with 25% of people worrying that they will miss their colleagues when they retire.
On average people estimated that, each month, they spend €304 on food, €235 on utility bills, €104 on entertainment and socialising and €102 saving money into a savings account. Of the 59% of people who are saving into a pension fund, the average person is contributing €101 a month to their pension. The average spend on utility bills per month was more than double the average amount spent on savings or pensions.
Bernard Walsh continues “It’s easy for people to understand and list their current day to day expenses but everyone finds it difficult to estimate what their expenses will be in retirement. It’s important to note that some of their expenses will remain the same, whilst others such as their mortgage and the costs associated with children will hopefully not exist, or be much reduced”.
Of those that have a pension, four fifths have one through their employer; one in ten took out their pension directly with a financial institution and one in ten through an intermediary. 49% of people asked said they haven’t started saving for their retirement, of these 62% don’t have a partner and 55% don’t have dependent children. 32% of people who have started saving are doing so through a pension fund and believe they could be saving more.
For those people who are not saving or could be saving more for their retirement, the most common reason is because they believe they can’t afford it (63%). Affordability and a lack of understanding about pensions are stronger reasons for women (61% and 23% respectively), whilst not wanting to commit money to a pension is a stronger reason for men (22%).
Other key findings include:
- Just under 50% of people indicate that they could afford to contribute up to €49 a month.
- Overall, the average amount that respondents claim they can afford to contribute is €89 a month
- Clear urban divide is apparent from the findings, with Dublin and the rest of Leinster claiming to afford above the average of the rest of the country (Dublin average of €104, the rest of Leinster €90, €81 in Munster and €71 in Connaught and Ulster)
- People with children claim to afford an average of €83 while couples with no children are affording a higher average of €101
- Of people surveyed, those currently saving for their retirement (and happy with the amount they are saving) began at the average age of 26 years old. Almost half of the people surveyed started between the age of 25 and 29
- One in four of those people happy with the amount they are saving think they have a good idea how much income they will have when they will retire, though one in five have never reviewed what income their pension will provide them with
When asked about the current State pension, just under two thirds of people claim to be aware that the State pension is €206.30 a week. Awareness is slightly higher among males, 40-45 year olds, ABC classes and those with a partner. Three quarters of people indicate that they lack confidence that they could live off the current state pension, with people between 40-45 years old the least confident. Half of people surveyed claim to be aware of the State pensionable age increasing, with awareness higher among males, those with partners, 40-45’s, Rest of Leinster and those already saving into a pension.
“There is a definite lack of awareness around the State pension and especially around the pension age increasing from 65 to 68 for anyone born after 1961.The good news is that people still have time to bridge that gap. For example a 40 year old could bridge it by saving €28 per month”, added Bernard Walsh.
Some key findings around retirement funding plans include:
- Four fifths of people surveyed would prefer to retire early, with the desire for early retirement highest amongst current pension savers
- An average of four in ten people has a savings plan, with nearly six in ten planning to open a savings plan. A further one in five have other investments or an investment property, with 7% relying on an inheritance to help fund their retirement
- Half of those surveyed expect to be stretched or have a lot less money to spend when they retire, with females, 35-39 year olds, those in the greater Leinster region and those currently not saving into a pension the most pessimistic
- More than 50% say they are likely to take a part time job to supplement their income when they retire, with 45% of people saying they would move to a smaller residence. 19% said they would rent out a room
With the life expectancy of a female at 83 years, the survey found that most people were aware of what the average age expectancy was, with women and people with children selecting the age of 85 years old. With the life expectancy of a male at 78 years, most people have a good idea, with four in five selecting either 75 or 80.
“There is an old Chinese proverb “the best time to plant a tree is 20 years ago – the second best time is now. If you haven’t put a plan in place to save for your future, then now is the time to start”, concluded Bernard Walsh.
For further information, please contact:
Anne Mathews, Media Relations Manager, Group Communications – 076 623 4771 / 087 2460358
Notes to Editor:
303 interviews were conducted among 30-45 year olds between the 29th July – 2nd August 2013. All interviews were conducted online and quotas were set to reflect the national profile of this audience.