'Redesign pensions' to attract under-35s group
PENSIONS need to be totally redesigned and no longer called pensions to avoid them being a turnoff for the under-35s, a leading economist on the business of ageing said yesterday.
People need to be able to access some of their pension money throughout their life, while they should be encouraged to start saving earlier, UBS economist George Magnus told a conference.
He said the average Irish person will end up spending 25 years in retirement by 2050 -- more than three times as long as those who retired in the 1950s and 1960s.
But huge swathes of the populations of Western countries have made no pension provision, while half of those in work are making inadequate provision for retirement.
Mr Magnus, who is the author of 'The Age of Ageing', said the over-65s will make up 25pc of the population of Ireland by 2050.
"The financial crisis will go eventually and wither away, but this [the fact society is ageing fast] will be with us for a long time and it is not readily understood by governments," he told the Business of Ageing conference in Dublin.
The focus of marketing efforts was the 25 to 60 age group when in fact up to three- thirds of the assets in the West were in the hands of the over- 50s, Mr Magnus said.
Rapid ageing of societies raised huge issues about the provision of pensions, healthcare and residential long-term care, he said.
But older consumers were also big spenders on high-end cars, cruises and care products.
Irish people over the age of 65 have declared income (to the Revenue Commissioners) of €6.6bn. Older people continue to spend on eating out, new cars, holidays and home improvements. In contrast, Mr Magnus said those currently in work were often not saving for retirement.
"You just can't have a conversation with a person under the age of 35 about pensions. They have no interest," he said.
He added there was a need to get younger people into the savings habit early.
Marketing consultant and author Dick Stroud characterised those in the public sector with good pensions as the "charmed" segment of the over- 50s, while those in the private sector where pension provision was poor or did not exist were the "anxious".