Your Money

Half of Irish workers say they will have to keep working in retirement

Sobering survey shows workers are saving than 10% of earnings for pension

Despite putting so little into retirement savings, Irish workers still expect to have pension income amounting to almost two-thirds of their working income. Photograph: iStock
Despite putting so little into retirement savings, Irish workers still expect to have pension income amounting to almost two-thirds of their working income. Photograph: iStock
Tue Sept 25 2018 - 07:54

The findings of an extensive recent survey on retirement planning make for sobering reading. More than eight in 10 Irish workers are not confident of being financially secure in retirement.

The fact that some others in the survey of eight countries – the US, UK, Australia, Sweden, Germany, Italy and Denmark are the others – have even less faith in their future financial wellbeing is scant comfort.

The survey by State Street Global Advisers and YouGov also shows that people approaching retirement are increasingly likely to accept that they will work at least part-time in retirement. The same is true for young people, and the pattern is common across all eight countries. However, the figure for Ireland – where 50 per cent of people still working expect to have to find some employment in their pension years – is higher than most.

Part of the problem may lie in the data on how much people are saving for their retirement. Even in the best-performing countries – Italy and the Netherlands – a worrying 44 per cent of workers are putting away less than 10 per cent of their earnings in pension savings of some form.

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Unrealistic

In Ireland, that figure is 58 per cent: almost six in 10 workers are saving less than 10 per cent. Only the British save less. Yet the average Irish worker still expects to have pension income amounting to almost two-thirds of their working income. How unrealistic is that?

Even with retirement looming, 44 per cent of those within five years of expecting to live on their pension are still saving less than 10 per cent of earnings.

Perhaps that explains why one in four of those people approaching retirement now expect to retire later to make up the shortfall between their retirement savings and expected spending in retirement. And, in common with most countries, except Australia, even a greater number of younger workers expect to find themselves in the same position.

All of which just bolsters the argument for auto-enrolment – due to be introduced in 2022 – if the next generation is to try not to repeat the mistakes of the current one.