Retirement time bomb fear as workers in their 20s urged to start planning now
Published 28/04/2016 | 02:30
HALF of those in their 20s and 30s do not believe the time is right to start a pension.
The survey results indicate that many people in their 30s saddled with substantial mortgage and childcare payments regret not starting a pension in their 20s when they had considerably more disposable income.
The failure of younger people to start a pension is despite the fact that most of them believe that it is wise to start a pension in their 20s, according to a survey of 1,000 people throughout Ireland.
The survey was commissioned by regulated renewable energy fund provider, Greenroom Investments and conducted by IReach.
Greenroom Investments said that up to half of workers in their 20s were offered employer-sponsored pension schemes in public sector or large companies.
But it appeared that the vast majority of the remaining young workers left to their own devices chose not to start a pension.
Director of Greenroom Investments, Michael Bradley commented: "Many people in their 20s have more disposable income than those in later years - they start their first job so they have a salary coming in but often their financial responsibilities and therefore their outgoings are low.
"So it would make financial sense to begin a pension in your 20s - but the reality is that this simply doesn't happen.
"We're in the midst of a pension crisis - it's a time bomb that's likely to go off when today's twentysomethings hit retirement; there simply won't be enough in the State reserves to provide people with a sufficient State pension," he added.
"For this reason, it's so important that people take a proactive approach and ensure, through their own pension planning, that they won't be destitute once they hit retirement age."
He said the key to effective pension planning is starting early.
"The sooner you begin your pension the better - that's pretty much the crux of it. Those who save into a pension funds in their 20s and 30s have a far better chance of accumulating a much more significant retirement pot than those who leave it until later in life - even if the latter put in more substantial sums."
Experts at Greenroom Investments suggest the long-term nature of pension planning is the problem.
Mr Bradley said that when you are in your 20s, retirement seems a world away and not something you should concern yourself with just yet.
"But that is absolutely the wrong approach."