One in three workers in the State have made no plan for income in retirement beyond the State pension, according to the annual pension coverage report from the Central Statistics Office (CSO). That figure is almost static on 2020 despite ongoing Government campaigns to improve pension coverage.

It comes as plans to introduce auto-enrolment of most employees into a private pension arrangement have been deferred again – to the end of next year.

Younger workers continue to be less likely to have started saving for a pension, with only a quarter of people between the ages of 20 and 24 opting for a private or occupational pension.

But even for the group most likely to have a private pension – those aged 55-69 – more than one in four has no savings for their looming retirement.

Affordability

Among those with no pension savings, 40 per cent said affordability was the biggest barrier, with another 45 per cent saying they simply had never got around to setting one up.

In most companies, employers will match staff contributions into a pension fund up to a certain limit. Tax relief is also available on money a worker invests in a pension – at 40 per cent for those paying income tax at the higher rate.

Half of those with no pension coverage say they expect to rely on the State pension – which currently pays up to €253.30 a week – as their main source of income in retirement.

Chartered Accountants Ireland (CAI) said the "persistently low" pension coverage was a major challenge for State.

“We have long argued that the sustainability of the State pension cannot be addressed without parallel reforms to increase private pension coverage,” said Cróna Clohisey, tax and public policy lead with CAI, citing auto-enrolment.

Among those with pensions, the trend towards defined contribution schemes – where the pension is determined by how much you save and the investment performance of those funds – continues. Such schemes now account for almost 70 per cent of pension schemes.

The number in defined benefit schemes – where your years of service and salary determine the amount paid in retirement– is just 28 per cent. That’s down five points over the last year.

Workers classed by the CSO as “professionals” are most likely to have private pension coverage. Coverage for those in “skilled trades” is just more than half that level, at 43 per cent.

Civil and public servants had the highest level of pension coverage.