Pensions uptake falling despite ?1.5m campaign
Aideen Sheehan THE number of people taking out pensions is falling despite the millions of euro which has been spent trying to encourage people to save for their future.
The proportion of people who have pensions fell from 52.4pc of the working population to 51.5pc in the first quarter of last year, new figures from the Central Statistics Office reveal.
The figure is far short of the official government target of 70pc pension coverage and moving in the wrong direction, despite a ?1.5m campaign to increase pension uptake in the last few years. The private industry has also tried, unsuccessfully, to flog Personal Retirement Savings Accounts (PRSAs).
Yet, at the same time, purchases of second homes and investment properties has soared, prompting industry analysts to call for radical new government schemes that would make purchasing a pension as attractive as buying bricks and mortar.
Pension cover fell to 43pc of self-employed and to 53.3pc of employees last year. Women were the only group who increased coverage from 46.8pc to 47.5pc, but they still lagged behind men whose coverage fell from 56.3pc to 54.2pc, the CSO's Quarterly National Household Survey shows.
Pension coverage fell amongst every age group except those aged between 45 and 54 where it rose from 59.8pc to 60pc. The Pensions Board, which oversees and promotes pensions on behalf of the State, conceded that the new figures were disappointing but not surprising.
"We cannot force someone to take out a pension, but we have spoken publicly about the need to bring in measures that would make them very attractive," said spokesman Aongus Horgan.
These included the government matching ?1 for every ?1 of personal contributions to PRSAs, and incentives to invest SSIA funds in pensions along with options to draw out funds before the age of 45.
"Soft-mandatory" pensions, where employees were included in a pension scheme unless they decided to opt out, should also be considered, he said.
Mr Horgan said that, despite the fall in coverage rates, an extra 30,000 people had taken out pensions in the period looked at by the CSO, but that was dwarfed by the 70,000 increase in the working population.
Pension and Mortgage broker Liam Ferguson said that many people simply found property a more attractive and tangible investment.
"The difference with buying property to buying a pension at the PAYE level is that it's probably the simplest form of investment.
"You can touch it, you can see it, you can feel it and you can borrow to invest in it," Mr Ferguson said.
Friends First Chief Executive Adrian Hegarty said the latest figures were alarming and showed the urgent need to bring in tax incentive to convert SSIAs into pensions.
"In case there was any doubt today's figures confirm the failure of PRSAs. If this slide continues, compulsory pensions cannot be ruled out," he said.