Tuesday 24 April 2018

'Women are hopelessly under pensioned'

ANNE-MARIE Dermody feels strongly that, when it comes to pensions, women have a lot of catching up to do.

"Women are hopelessly under pensioned," the Dublin-based solicitor says.

"It is to do with a number of factors -- chiefly children, breaks in service and the fact that women still lag behind our male counterparts when it comes to salaries."

A partner with Maurice Lyons, in Lyons Dermody Solicitors in Parnell Square in Dublin, she started to pump money into a pension in her early 30s as soon as she had a stable income.

But she became concerned that her personal retirement savings account (PRSA) was not going to provide her with the type of return she wants in order to ensure she has a decent standard of living in retirement.

"As a self-employed person, I was acutely aware of friends and colleagues who had not allowed for their future and found they were facing into a much-reduced standard of living on retirement," she says.

That is the type of mistake the 41-year-old is determined to avoid. And it helps that her husband, Eamonn Connolly, an engineer, has been a trustee for the ESB pension scheme.

"He is a member of a defined benefit scheme and this served to highlight the weaknesses in my armoury in retirement," she says of her husband.

The couple have three children -- Gavin (11), Oisin (9) and Diarmuid (6).

Ms Dermody's decision to boost her pension came at a time when she and her business partner were looking at buying the Georgian premises they were leasing on the capital's Parnell Square.

She decided to combine the two and ended up choosing to use her pension to purchase the premises.

After speaking to a number of advisers and banks, she chose Bank of Ireland Life to help put the pension deal together.

"The pension-backed mortgage is structured in a most tax-efficient manner as it maximises interest available against profit.

"Instead of paying down the loan, we are paying into a pension fund and, at the end of the term, there will be enough to pay the mortgage.

"Each quarter we pay a lump sum. The mortgage type is akin to the old equity/endowment-type mortgages, where we pay into our pension fund and, at the end of the term, the return on the pension will be enough to redeem the mortgage."

This means that when it comes time to retire from the legal world, Ms Dermody is banking on not only having a property that has been paid for, but a decent pension as well.


Irish Independent Supplement

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