The State is likely to be put under severe pressure in the coming decades with close to 900,000 people expecting the €230 per week State pension to be their only source of income in retirement, according to a wide-ranging report.
The figure is one of numerous stark projections uncovered by the Friends First 2015 Pension Index which also finds more than 75% of respondents are not confident of having sufficient income on retirement.
Of those without a private pension, a third admitted they hadn’t really thought about what they’d live off in retirement.
Friends First Pensions and Investments director, Simon Hoffman warned the results could place a huge burden on the State and would leave people with an income less than the current minimum wage.
“The postponement of financial planning for the future is still a concern. We have an aging population and the number set to rely on the State pension as their sole retirement [income] is in around the 890,000 mark.
“This will put a huge strain on the State in the coming years as those without a private pension may struggle financially in their retirement and will be depending on a pension that is less than the current minimum wage,” Mr Hoffman said.
Some 43% of people surveyed have no pension or no spousal pension while 55% cite affordability as the key barrier to starting a pension.
The issue of affordability is more pronounced among over 35s with 67% of this cohort flagging it as an issue.
A small bright spot was to be found in the figures which show four-in-10 25-34-year-olds have a pension, up from 36% last year.
Those in this age bracket were the only cohort to register an increase in the number of private pensions.
“However, with improving economic circumstances and consumer spending beginning to increase, pension affordability should become less of a barrier,” Mr Hoffman said. “The bottom line is although it is better to start early, it is never too late to start making provisions for a comfortable retirement.”
Of those yet to take out a pension, 55% said they were likely to do so in the future but a further three in 10 indicated they may rule out the possibility entirely.
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