Majority worried about lack of money on retirement

Almost six in 10 Irish people are worried that they will not have enough money to fund an ‘adequate’ standard of living when they retire, according to a new survey.

Hibernian’s survey of almost 1,000 consumers in Ireland also shows that 54% of current retirees in Ireland regret not having started a pension earlier.

Highlighting the lack of financial preparedness, 61% of respondents to the Hibernian survey have also admitted that they would like more advice on how to manage their personal finances.

An analysis by Hibernian Life & Pensions also shows that delaying taking out a pension by just a few years can reduce the size of a retirement fund by as much as half and will also see generous annual tax benefits disappear.

The research also shows 55% of people are prepared to fund their retirement by working beyond the normal retirement age of 65.

“Obviously the financial market turmoil is a cause of serious concern for a lot of people and the feedback we have been getting in Hibernian is that consumers are clearly nervous about investing at the moment because of this turmoil,” said Mark Reilly of Hibernian Life & Pensions.

“However, by not investing in a pension early enough retirees may be forced to live a very frugal lifestyle. Many will have just the state pension of €223.30 per week to live on or the equivalent of about €12,000 per year and will find it challenging to purchase just the basic requirements like food, clothes, light and heat.”

“When you’re young, a few extra euro invested for the long-term makes a significant difference. For example, at age 25 a contribution of €300 a month can grow to almost €680,000 when you retire. But if you decide to wait another 10 years and start investing in your pension at age 35, the size of your retirement income based on the same monthly contribution decreases by half to just over €330,000.”