€3 for your latte could buy a slap-up meal when you retire
From economic boom to bust to bailout, Ireland's 20-somethings have already faced many changes and challenges. However, possibly the biggest challenge they face is one with which many of them are completely unfamiliar – our ageing population.
One in five 20-somethings may live to be 100. When they come to retire in 40 to 50 years, there will be only two workers for every retired person, as opposed to five for every retiree today. This demographic shift means they will need to work much later in life or start saving much sooner and more than previous generations because the State will not be able to provide the same level of support to people in retirement as it does now.
Many occupational pension schemes offer voluntary membership, so an employee must opt in to avail of a contribution from their employer towards their retirement plan. Our analysis of a representative sample shows that more than 70pc of employees in their 20s are not taking up the offer of employer contributions to pension. On average, they are leaving behind some €1,600 per annum of unclaimed employer contributions. This equates to approximately €80m per annum across the population.