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41% of Irish will be relying on the State Pension as main source of income

Written by Robert McHugh, on 24th Nov 2020. Posted in Financial

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More than 4 in 10 adults expect State Pension to fund retirement according to a survey by protection specialist, Royal London.

The survey of 1,000 adults nationwide, commissioned by Royal London and carried out by iReach, also revealed that 74% of people underestimated how much of a pension fund would be needed to provide a modest pension income of €200 per week, with 60% of those between 18 – 24 significantly underestimating this cost.

Nearly 33% of adults believe a pension fund valued at €200,000 would generate €200 per week in retirement. Twenty seven percent believe €100,000 is needed, while 14% believe that €50,000 would suffice. All these assumptions are incorrect – in reality, you would need a fund in the region of €300,000 based on current annuity rates.

The Royal London survey found that, while only 28% of adults at the early stages of their career (25-34) believed that they would primarily be dependent on the State Pension in retirement, that percentage of people had almost doubled to 50% for those aged 55 and over.

Commenting the research, Pensions Proposition Lead at Royal London, Mark Reilly said, "The Central Statistics Office estimates that the number of people aged over 65 will almost treble to 1.45 million people between 2011 and 2046*. Therefore, the task of financing this level of increased pension provision will fall to a decreasing share of the population. This coupled with Ireland’s low level of pension take-up is worrying."

He added, "The National Risk Assessment 2019 suggests that a high percentage of the working population is not saving enough, or is not saving at all, for retirement, and contends that this presents a significant risk both in terms of the funding and sustainability of pensions in Ireland."

Source: www.businessworld.ie

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