Economist warns of risk of ‘retiring poor’

WORKING beyond the age of 65, poorer pensioners and higher taxes will be the way of the future if the government fails to take the necessary action to improve pensions coverage, Friends First chief economist Jim Power said over the weekend.

But the €15 billion windfall from the Special Savings Incentive Account (SSIA) scheme was “a major opportunity” to close the pensions gap.

Mr Power called on the government to encourage people to make provision for their retirement by offering more generous tax breaks for investing in pension schemes. This could include scrapping the exit tax on SSIAs, which would otherwise eat up 23% of each account’s interest or investment gains, and targeting low-paid workers with extra tax relief on pension contributions.