Irish Women Face Pension Threat
The Irish economic downturn is making consumers focus on reducing debt, saving for the future and making sure that they have appropriate pension provision, according to pension and investment experts, Friends First.
54% of Irish consumers surveyed in August, say their key financial priority is to reduce or manage debt, while 43% of consumers surveyed say they want to start a savings fund. Almost 64% of Irish people surveyed have a pension, a five per cent increase on 2009. However, the Friends First Pension survey, reveals that Irish women are less well prepared for their retirement than their male colleagues, with 43% of women admitting that they do not have a pension plan, in comparison to 30% of men.
According to the research carried out by Empathy Research on behalf of Friends First, 25% of respondents don’t know what kind of pension cover they have, alarmingly this rises to 38% among females surveyed.
Almost a third of Irish people (30%), who have a pension, contribute between 6 and 10% of their salary to their pension annually. Once again, Irish men are contributing more than women. 35% of Irish men contribute between 6 and 15%, in comparison to 24% of Irish women. Overall, 28% of respondents admit they don’t know how much they contribute, as it is automatically deducted from their salary. Alarmingly, this rises to 38% among Irish women.
Commenting on the findings, Simon Hoffman, Pension and Investment Manager, Friends First said; “This research indicates that there is a real inequality between the sexes when it comes to pension provision. Our survey reveals that women are less well informed and therefore at a greater risk of not providing adequately for their retirement. This inequality is a cause for concern and points to a need for greater education among female workers.”
This survey highlights that the complexity of the current tax based benefits is a barrier to increasing coverage with 40% of those surveyed saying they did not fully understand the benefits available when taking out a pension. Worryingly, this figure increases significantly in the areas where the Government is specifically trying to increase coverage: 50% amongst females, 53% amongst the young 25-34 age bracket and 54% amongst those without a pension.
The research also demonstrates a clear preference among Irish consumers surveyed, for an alternative SSIA type pension scheme over a tax benefit scheme. 74% of people surveyed said the introduction of an SSIA type pension scheme would encourage them to either start a pension or increase their current pension contributions, versus 46% who said a tax benefit would encourage them to do likewise.
“It is clear that perceived complexity remains a significant barrier to increasing private pension provision. The recently published National Pensions Framework Strategy document gives us an opportunity to address this in a significant manner. By tinkering around the edges with our pension system over the last number of decades we have created a system which alienates those who need pensions most. In addition to the fiscal changes which are needed so that we have an affordable pension system – consumers are clearly asking legislators to simplify things so that they can more readily understand what they are getting into.” added Simon Hoffman.
