Over 50pc of 'grey generation' have no private pensions
Tuesday October 30 2007
MORE than half of the over-50s have no private pension and will be forced to rely on the State to pay for their retirement, new figures have revealed.
This means that most of those between the ages of 50 and 65 are facing into retiring with only the State pension of €209.30 a week to survive on.
New research carried out by AIB found that only one in five of the over-50s are financially prepared for the future.
The findings come as a surprise, as a number of commentators have insisted that recent rising property prices and the boom of the past few years have put the "grey generation" in the best position to reap the rewards of the good times.
Younger people, on the other hand, have ended up burdened with jumbo mortgages because of surges in property values over the past decade. The survey, carried out for AIB by Red C, found that just 43pc of those over 50 have a private pension.
Despite this, half of those surveyed said retirement planning and pensions were a key issue for them.
One in three of those questioned expressed concern about their finances for retirement.
The findings dovetail with research, also issued yesterday by Standard Life, that found that two out of three retired people would handle their finances differently if they got another chance.
More than a third would have started a pension earlier, while a quarter would have put money into long-term savings.
Important
Brendan Barr of Standard Life commented: "We believe the survey is telling us that these retired people had no idea how important and how much sense it made to contribute to a pension until it was too late.
"Had they known, the survey suggests, they would have started earlier and paid more into their pension."
Starting a pension earlier was the top choice as to what they would have done differently, despite property's stellar performance in the past decade, said Mr Barr.
"It appears that many people understand that pensions are probably the most tax-efficient investment available to them."
The State pension of €209.30 amounts to €10,883.60 a year.
Some 20pc of the pensioner population are in danger of poverty, according to a recent book on pensions, edited by Trinity College academics Gerard Hughes and Jim Stewart.
This has improved markedly from 33pc in 2004, but still high by international terms, the academics argued.
By 2012, the Government has committed to raise the weekly pension amount to €300. But by the time that is achieved, €300 will be below the minimum wage.
Research in the Green Paper on Pensions, issued by the Government two weeks ago, found that the average net income for pensions in 2005 was €327.55. For all households the net average weekly income was more than double this at €776.11.
For more personal finance stories, see Your Money on pages 30 to 33
- Charlie Weston Personal Finance Editor
