6th February 2020: Our new study has found that 37% of adults in Ireland without a pension blame rent and other day-to-day bills for making it impossible for them to afford pension contributions.

New Pension Survey finds rent and bills contributing to low pension enrolment levels

Our Pensions survey conducted last month, also reported that 48% of adults in Ireland do not have a pension.

Of the 52% surveyed who do contribute to a pension, two fifths (41%) say that they are not confident that their pension will be enough to live off in retirement, based on current contribution rates.  A further 31% responded that they simply didn’t know if their pension would be enough for retirement.

The state pension age has become one of the hottest topics of debate between the political parties and the electorate ahead of the General Election this weekend.  Given that the research was conducted during the election campaign period, it raises the question as to whether the heightened awareness and conversation around pensions impacted the findings, which include:

  • 29% of adults without a pension are planning to start one this year
  • More than two thirds (69%) of those with a pension said that they planned to increase their contributions in the future.

Barriers to starting a pension

For some people, pensions just aren’t on their radar, says Breda Dooley our Athlone Branch Recruitment Manager, referencing the 12% of respondents who say that they are too young to worry about starting a pension.  But for the majority of those who don’t have a pension, the barriers include

  • High cost of rent and day-to-day bills (37%)
  • Waiting to earn more money (16%)
  • Not knowing how to start a pension (14%)

“The more traditional reasons for people not starting a pension have been well documented. Lack of knowledge, inertia and the assumption that a pension is not relevant are all issues people generally reference.  But now, according to these findings, we are seeing that a significant number of people without a pension saying that they can’t afford it,” said Breda Dooley.  “What makes this more worrying is that with Ireland’s growing aging population and the pension savings gap getting wider, the real question is, can people afford not to have a pension?”

Pensions in Ireland survey tile 1

Reliance on inheritance a cause for concern?

Despite these positive signs, huge gaps in knowledge and understanding prevail, according to Breda Dooley, with the findings showing that:

  • More than one in five (22%) workers say they do not know their annual pension contributions as a percentage of salary
  • 17% do not know what type of pension they have
  • 13% have no idea if their company operates a pension plan
  • 12% are hopeful that an inheritance from their parents will provide for their retirement needs

Almost a third of people surveyed (30%) were found to have no knowledge of what pension options are available to them, highlighting the need for continual and clear education programmes, which should start in school, according to Breda Dooley.

“21% of respondents to the Matrix Recruitment Pension Survey said that more people would start a pension if the process was easier.  Setting up a pension is not actually that difficult as either an employer or a pension broker can take care of the administrative burden.  But it’s going to take a concerted effort from all stakeholders to eliminate the perception that starting a pension is complicated and confusing,” said Breda.

Occupational pension scheme important to employees

Our Pensions in Ireland 2020 Survey found that when it comes to workplace benefits, 93% perceive an occupational pension scheme to be an attractive perk.  In fact, a workplace pension scheme has influenced some 43% of respondents to remain with their employer.

When it comes to encouraging Ireland’s workforce to start a pension, the importance and influence of an occupational scheme cannot be underestimated, according to Breda Dooley.  “Employers have an important role to play when it comes to awareness, education and supporting workers in planning for retirement. What’s particularly interesting is that 86% of those surveyed said that they would increase their pension contributions if their employer matched them. This is a significant number and is perhaps something that the government and the private and public sectors should look at in more detail.”

55% wish they had started their pension sooner

Most people who completed our Pensions survey (58%) said that having a pension is very important and 60% say that a pension should be started by the age of 26.  However, according to the Pensions Survey, 55% of those with a pension wish they had started it sooner.

“There is not always a direct correlation between what we think and what we do,” said Breda Dooley.  “While people recognise the importance of having a pension, the cost of living, confusion around pensions and not knowing how to start one are all contributing to the low levels of enrolment in Ireland.”

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Gender pension gap an issue for women

The Pensions Survey found that men are more likely to have a pension than women (60% V 48%). Regarding financial security in retirement, men were also found to be more confident than women that their pension would allow them to live comfortably in retirement (41% v 20%).

“The gender pay gap has received increased attention in recent years, but it’s time to give the same consideration to the gender pension gap. While things are changing, women can be at a disadvantage in terms of lower salaries and reduced earning power during maternity leave, for example. Knowledge is an important part of solving the gender pension gap, so it’s worrying to see that so many women are in the dark about how to set up a pension and it’s something that needs to be addressed,” says Breda Dooley.

Auto-enrol scheme popular decision

While the state pension has become a contentious topic for voters, our survey found that the Government’s plans to start an auto-enrol pension plan in 2022 is a popular decision with the public.

Of those surveyed, 76% are in favour of the programme that will automatically enrol all workers over the age of 23, earning more than €20,000 and without a pension into the scheme, to which they, their employer and the government will contribute.

“This is a welcome initiative that will ensure pensions are on everyone’s radar from an early age.  There are caveats; individuals can opt out after six months and contributions can be the bare minimum, but anything that encourages people to consider a pension has to be a good thing,” said Breda Dooley.

About this survey:

The Matrix Recruitment Pension Survey was undertaken online in January 2020 among 533 adults over the age of 18. Matrix Recruitment is one of Ireland’s leading recruitment firms.  Established in 1998 and with offices in Dublin, Waterford, Carlow and Athlone Matrix specialises in a number of job categories including accountancy, financial services, engineering manufacturing, quality & laboratory, supply chain, HR, office support, IT and sales & marketing.

www.matrixrecruitment.ie.       @Matrixrecruit                #MatrixPensionsSurvey

View full Pensions in Ireland Report Infographic here

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