Survey finds 70% of employees are unaware of proposals and allowances

OVER 70% of employees were unaware of the Government’s National Pension Framework proposals and its plans to standardise tax allowances on pension investments.

Just one in five of those with a pension (19%), have sought advice since its launch earlier this year, according to research issued yesterday by Bank of Ireland Life.

The research was carried out by the life and pensions company in the run up to the launch of its annual pensions campaign and to highlight the need for professional pensions.

Fewer than half (48%) of those surveyed knew about the pension proposals or understood the impact they would have on their retirement plans.

Among those without a pension, 88% said getting professional pension advice when starting a pension was important.

Of those, just over 60% said that they are going to seek pension advice specifically in relation to how the National Pensions Framework proposals could affect them and their retirement planning.

The study found that 77% of workers were not aware of the Government’s proposal to reduce the tax relief on pension savings to a standard rate of 33%.

Having been informed of that change 46% said they were likely to start or top up their pension savings immediately in order to maximise the higher tax relief currently available.

Some 71% of those surveyed were aware of the proposal to increase the state pension age, but just 12% had sought advice in relation to bridging any financial gap that this proposal was likely to create.

In 2014, the state pension age will be increased by one year to 66; in 2021, the state pension age will be set at 67 and in 2028 it will be set at 68.

Meanwhile 75% of employees questioned said they could not survive on the state pension alone, which currently amounts to €230 a week.

Bernard Walsh, head of pensions at Bank of Ireland Life, said: “With 81% of employees surveyed not seeking pension advice for a year or more, there is clearly an increased need for people to speak to a pension expert in order to maximise the current tax relief regime.”

Mr Walsh added that the proposed changes to the pensions would impact on everyone who has an income. “However, it’s never too late to take steps to ensure that you have a comfortable retirement and the lifestyle you deserve at the end of your working life.

“People need expert help to navigate their way through these changes and to agree a comprehensive plan,” he added.