Ireland’s Two Speed Pension Economy – New Survey shows whilst some people have stopped making contributions to their pensions, it is being offset by more people increasing their contributions
Ocean.ie, a leading pensions advisory firm in Dublin has just released a pensions survey conducted amongst 503 respondents over a six-week period from February 15th to March 30th 2013.
The survey was carried out exclusively online using age, gender and other demographic profiling via facebook with the aim of obtaining a broad spectrum of respondents.
“The pensions timebomb has still to be defused. If today’s 30 year-old wants a retirement income of €514 per week, this would require up to 20% of salary pension contribution for the average earner.”
Only 1% of respondents said they would trust their bank to review their pension performance.
37% of people in the last 3 years have increased their pension contributions whilst 13% have stopped altogether in that period.
67% of people did not consider the current state non-contributory pension of €230.30 per week to be sufficient to meet their future financial needs, with €514 per week being the average identified as being necessary at retirement.
Survey Results Analysis
The survey purpose was to gain insight into how well people understand pensions and pension funds and also how they feel about retirement and what their financial needs will be at retirement.
1) RETIREMENT PLANNING AWARENESS
One of the key questions asked was “what is the current level of state pension?”
Of the responses received 57% were aware that the current weekly state pension is €230.30 whilst 43% were not.
The next question raised was more interesting in that respondents were asked would this figure be sufficient to meet their financial needs and 67% of respondents said it would not. In fact the average weekly amount identified by our respondents is €514.00.
2) CONTRIBUTION DISCIPLINE DURING ECONOMIC DOWNTURN
In the last three years:
- 13% have stopped contributing to their pension,
- 21% have reduced their pension contributions,
- 29% have stayed the same
- but interestingly 37% have actually increased their pension contributions over that period.
3) PERFORMANCE/SUITABILITY AWARENESS OF THEIR OWN PENSION FUND
The survey also set out to establish the level of knowledge current pension holders have over their pension plans and the following ‘Do your know’ questions were asked with a yes/no response:
4) FREQUENCY OF PENSIONS PERFORMANCE REVIEW
In relation to the questions asked above the survey also focused on the respondents attitudes with regard to reviewing their retirement planning and who should carry out that review.
Respondents were asked how often they review their pension arrangements;
- 43% indicated every year,
- 8% very three years,
- 1% every 10 years
- 32% have never reviewed their pension arrangements.
Asked again how often they would like to review their pension arrangements 43% said once a year, 15% every three years, 10% every 5 years and 31% never.
5) TRUSTWORTHINESS OF THIRD PARTY ADVISERS
Respondents were asked to indicate who they would prefer to review their pension arrangements and the responses were as follows:
Life Assurance Provider: 4%
Independent Financial Advisor: 54%
Own Research : 2%
Their Bank: 1%
All media queries/interview requests can be directed to Terry Palmer or Philip Doyle of Ocean.ie, 46 Prussia Street, Dublin 7 on 01-8693400.
PHD Financial Services Ltd T/A Ocean.ie is regulated by the Central Bank of Ireland