Pensions an 'increasing burden on the State'

Concerns are being raised about the number of people who have not signed up for a pension.

An estimated that 890,000 people are currently planning to rely on the State pension when they retire, despite a finding that finances have improved for 37% of households, according to new research from Friends First.

The main reason people give for not putting money away for retirement is affordability.

Private pension ownership remains stable overall at 46% of adults.

On a positive note, those aged 25 to 34 showed an increase in private pension ownership. This is despite the research showing that almost eight in 10 (76%) respondents were not confident of having sufficient income on retirement.

When those without a private pension were asked what they would live on when they retired, 44% (compared to 40% in 2014) indicated the State pension (currently c. €230 per week) would be their sole income in retirement, with a further 33% admitting they hadn’t really thought about it.

Director of pensions and investments at Friends First, Simon Hoffman, said it is a worrying trend.

"With the demographics that we have, this is going to be an increasing burden on the State," he said.

"They've pushed the retirement age out - it was 65, it's now 66, it's going up to 68 - so more and more people relying on the State is going to put a burden that we know eventually that the State is eventually not really going to be able to stomach."

"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 is 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.

"However, with improving economic circumstances and consumer spending beginning to increase, pension affordability should become less of a barrier.

"The bottom line is although it is better to start early, it is never too late to start making provisions for a comfortable retirement."