A nationwide survey to uncover the financial planning and management habits of Ireland’s self-employed shows that 63% of respondents (all self-employed individuals) hold some pension benefit but it is largely inadequate relevant to pre-retirement earnings.
Furthermore, of those that have a pension 41% are still contributing to the fund, but 22% are simply relying on preserved pension benefits from when they were employees. The remainder of respondents i.e. those without pension benefit, will be solely reliant on State funding in retirement.
The research also shows that 20% of self-employed expect not to retire until at least 71, which is probably well beyond when they like would to retire, and typically 6-10years beyond the retirement of most pensionable employees.
Approximately 20% believe they will be over 71 when they retire. This was higher amongst: Males (23%), Those aged 55+ (30%), long term self-employed (22%), those with no pension (23%) – only 6% want to work over 71
Six in ten would like to retire between the ages of 61-70. The average age the self-employed person thinks they will retire is 68, 3 years later than the full retirement age at 65 years and 6 years later than their ideal retirement age of 62 years.
The Irish Brokers Association say that within the self-employed group – there are some who are more adversely affected than others.
CEO of the Irish Brokers Association, Ciaran Phelan says, "Unfortunately, our survey revealed that higher earners are far more likely to have a pension – only 36% of those who earn less than €50,000 have a contributory pension compared to 54% of those who earn over €50,000.
"However, the likelihood of a self-employed person having a pension improves the longer they’ve been running their own business - 36% of those who have been self-employed for less than 5 years have a contributory pension compared to 46% of those who have been self-employed for over 10 years – though this is likely to be a result of the older age profile of this group."