Zurich recently carried out research to gain insights into peoples’ attitudes and expectations when it comes to pension savings. The research also revealed people’s understanding and knowledge of how pensions work and highlighted levels of engagement with financial advisors too.
Nearly half (48%) of all respondents are working and do not have a pension followed by 27% working and having a company pension. For those in employment, the majority (75%) do not have a company pension. Nearly half of respondents (48%, down 5% since 2019) don’t have money to spare to put into a pension.
These findings are revealed in Zurich’s latest research into pensions in Ireland. This is the third year of this comprehensive research study and highlights the concerns many people have about their future and how they will maintain their standard of living when they retire.
Of those without a pension, 38% are never planning to start a pension (+9% vs 2019) with 47% planning on starting a pension in the next five years, and 77% plan to live off the state pension when they retire.
Nearly half (47%) of people who don’t have a pension think it’s too late to start saving for their retirement (up 5% since 2019) at this stage in their life. While 47% of those with a pension save less than €100 a month and the average monthly payment is €196 (down €24 since 2019).
For those with a pension, 56% believe that the contributions to their pensions are enough and 65% of adults would like to be able to save more into their existing pension funds. The average amount adults believe they should be saving more each month is an extra €293 (up €11 since 2019). 63% are concerned in some way, with 42% very and extremely concerned at having enough money for their retirement.
Over a third of respondents own their property and a further 34% are the outright owners of their property and live mortgage free.
Of those still repaying a mortgage or loan, 82% will have their mortgage paid off by the time they retire. For those in rented accommodation 43% are likely to be paying rent in retirement – up 15% since 2019.
Starting a pension
Over half of all adults believe starting a pension in their 20s is the best age to begin saving and nearly half of those surveyed think they need an income of between €20K- €40K to lead a normal life in retirement.
Half of all adults do not know how tax relief on their pension works (+9% vs 2019) and 61% of respondents do not understand how pension savings are invested.
Over half (57%) do not understand when and how you can access your pension fund (-4% vs 2019).
Of those surveyed 59% said they would be motivated to start a pension if they could access their money before retirement in certain circumstances.
When asked if they had a financial advisor that they can talk to about their financial planning, 72% said they didn’t.
*Source: Zurich Pension Survey 2020.