Low take-up of private pensions a cause for concern – Noonan
Published 01/02/2013 | 05:00
THE relatively low take-up of private pensions is a major concern for the Government, Finance Minister Michael Noonan has said.
He said it was imperative that the pension industry encourages low- and middle-income earners to invest.
Mr Noonan told a conference in central Dublin that about half of all workers aged between 20 and 69 have a private pension.
He warned that the figure may have slipped lower than this because of the financial difficulties faced by hard-pressed families.
"The fact that private pension coverage continues to be relatively low is of major concern to the Government," Mr Noonan said.
"With certainty now delivered in the area of tax relief, it is incumbent on the industry to develop competitive, cost-effective and rewarding products to encourage low- and middle-income earners to invest."
Mr Noonan said the Department of Finance had been petitioned to allow for an incentivised tax rate to apply to the budget proposal permitting savers to withdraw up to 30pc of their additional voluntary contributions.
He said he did not want to encourage people taking out money by providing tax incentives. Mr Noonan added that the renewed confidence in Ireland was coming primarily from international investors and that the pension industry had a role to play in the recovery.
"It is equally important that domestic investors have the confidence to invest in Ireland," he said.
"The National Treasury Management Agency, through its various bodies, and the industry are developing products to facilitate this."
Mr Noonan reiterated the Government's position that the country could return fully to the bond markets this year, but said it was a challenge and would be a milestone if successful.