Harsh re­al­i­ties of retirement life start to hit home

Irish Examiner - Supplement - - PENSIONS - John Daly

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.

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