Slight increase in numbers allocating funds to pensions
Survey results indicate desire for Irish auto-enrolment pension scheme
Introducing a mandatory pension scheme via auto-enrolment could improve pension coverage in Ireland.
Seven out of every ten Irish employees arenow investing in a pension, up slightly on figures for 2012. However, one in five of those surveyed have reduced their pension contributions in the past year, while half of these have stopped contributing altogether.
According to the survey by Friends First of 1,000 people , 71 per cent of employees in Ireland are now investing in a pension – up from 67 per cent in 2012 and 63 per cent in 2011.
Of those who do not have a pension, 63 per cent say they cannot afford to have one; 25 per cent have not got around to it; and 13 per cent say they do not understand pensions.
For Simon Hoffman, pensions & investment director with Friends First, the fact that 45 per cent of participants said that they would be encouraged to start a pension if they were automatically enrolled in one, offers a strong argument for the introduction of auto enrolment in Ireland.
“This demonstrates that if we can make the pensions landscape simpler and more accessible, then there is a real opportunity to increase pension coverage among private sector employees in Ireland,” he said, adding that the introduction of a flexible auto-enrolment scheme, similar to other jurisdictions could provide an answer.
“It is now time to make decisions and to introduce a complete solution rather than the piecemeal approach we have adopted in the past.”
The survey also pointed to another potential policy move for government, with 41 per cent of respondents indicating that they would also like access to some of their pension fund if they fell on hard times. At present, the options for accessing a pension fund early are very limited.