Harsh realities of retirement life start to hit home
The pension research conducted annually by Friends First reveals that almost half of people do not have a pension and of those who do not, eight in ten are not confident that they will have sufficient income when they retire.
The research also revealed that only a little over half (56%) expect to be mortgage free when they retire, with 9% saying they would be mortgage free about five years after they retire.
Simon Hoffman, pensions and investments director, Friends First, said: “Looking back, I think there has always been a realistic ambition, for most people, to be mortgage free when they retire. We assumed that if we worked hard, we would have a retirement free from the shackles of a mortgage or other financial concerns.
“However, the stark reality is that almost half will have to continue to pay a mortgage when they retire and they need to act now to ensure they can continue to make those payments. To do so people need take more control, to understand their financial commitments post retirement, and to start funding it now.”
Some 44% of adults personally hold a private pension, rising to 53% who have either a pension themselves or have a spouse with one. However, almost half do not have any personal provision for their retirement. Of those who do not have a pension, only four in ten people see getting a pension as a priority and while this is growing, one in six still rule it out. Of those without a pension, almost eight in ten are not confident of having sufficient income when they retire and only 30% believe they could comfortably live on the current state pension.
The State Pension is just €238.30 per week — but in response to the question, “How much do you think the State Pension is?” just over a quarter of all adults said they didn’t know how much it was. This rises to about a third amongst those without a pension.
“The term ‘pensions time bomb’ has been around for quite some time, but it has never been more relevant and appropriate to use than now,” says Mr Hoffman. “There has been very little movement in terms of pension ownership over the past number of years, despite many organisations advocating for it.
“In fact this research, which we have undertaken at Friends First for the past 10 years, shows very little change in penetration levels; it seems that people are just not prioritising it. I’d encourage people to take action to secure their financial future,” he concluded.
When people do their calculations, eight-in-10 are not confident that they will have sufficient income when they retire.