Pensions Board to target young professionals at music festivals

Pensions advice might not be the main draw for the thousands of gig-goers heading to this summer's Oxegen and Electric Picnic music festivals, but representatives from the Pensions Board are to attend both events in a bid to convince more young people to start saving for retirement.

National Pensions Action Week, which takes place from May 1st-7th, is to target workers aged 25-39 and women, who, despite their longer life expectancy, are less likely to have private pensions than men.

Launching the event yesterday, Minister for Social and Family Affairs Séamus Brennan said he was especially concerned that around 500,000 women in the workforce did not have their own pension and that there were low pensions coverage rates in the catering, distribution and construction industries.

Although State pensions were never meant to be people's total income in retirement, he said, over 900,000 people in the workforce of two million do not have private pensions.

Mr Brennan urged Special Savings Incentive Account (SSIA) holders to take advantage of Government incentives to invest up to €10,000 of their SSIA money in a pension.

It was announced earlier this year that SSIA holders who are taxed on their income at the 20 per cent rate or who are outside the tax net will be paid a bonus of €1 for every €3 transferred directly into a pension, up to a maximum bonus of €2,500.

The exit tax on the proportion of SSIA money transferred into the pension will also be refunded.

The Minister said the scheme, which has an estimated cost of €250 million, was on target to be in operation from June 1st, the day after the first batch of SSIAs mature. Draft guidelines will be circulated to the pensions industry within the next week.

Mr Brennan said the Government was considering improving incentives for all pensions savers on the lower tax rate or outside the tax net.

"If this is taken up, if it captures the imagination, then we will look at doing it permanently."

Two options suggested by the Pensions Board include a €1 for €1 matching scheme and the extension of the 42 per cent tax relief available to higher rate taxpayers to all pensions savers.

The Minister has also asked the board to "bring to a speedy conclusion" their discussions on the issue of mandatory pensions.

The topic will be discussed at a National Pensions Forum in Dublin Castle on May 5th, and Mr Brennan said he hoped to bring recommendations to the Cabinet before the Dáil summer recess.

"If we let it go cold, it could take years again before it warms up," he said.

"This is a societal issue, not a political issue and we have to make some courageous decisions if we are going to change the numbers."

Mr Brennan admitted that pensions were not top of young people's list of priorities.

"It's not the most glamorous subject for a 25- or 30-year-old. I don't know how many discos involve people chatting about pensions," he said.