A majority of people expects to be still in debt when they reach retirement age, it has emerged.
Two in five (38%) expect to be still paying a mortgage or rent after they retire and over a third (34%) believe they will need to support family members.
The latest Aviva 2018 Pension Index, published today, shows that 55% expect to be still in debt when they retire. That equates to almost 500,000 working adults aged 25-plus.
Of those who believe they will be financially supporting family members in retirement, one in five (19%) foresee educational fees as the main expenditure, while 15% see themselves providing a lump sum for a home deposit.
The youngest age group (25 to 34 years) is the most worried about meeting mortgage and rent payments when retired.
The index also shows that only two in five (42%) of those aged 25 to 55 have a private pension, a 4% decline since 2014.
More worrying is that 50% of people overall have no pension and 60% of them are not pushed about getting one. One in five (19%) believe they will never own a pension.
Almost half (49%) of those without a pension intend relying on the state pension, a 9% increase since 2014.
More than three-quarters (78%) of those without a private pension worry that they will not have enough money when they retire. Only one in five (22%) believe their income will be enough.
Head of individual life and pensions at Aviva, Ann O’Keeffe, said the pension index projects a very different retirement outcome than what many people expected.
“We are seeing an acceleration of the emerging trend where a significant number of people will still be paying a mortgage or rent in retirement, as well as having the burden of supporting their adult children,” said Ms O’Keeffe.
“People know they will not be able to live on the state pension but yet this isn’t mobilising private pension uptake rates.”
Most (61%) agreed with plans by the Government to automatically enrol people aged between 23 and 60 and earning more than €20,000 into a pension scheme.
When asked about the appropriate salary deductions, 3.8% was deemed to be the most acceptable deduction, compared with the Government’s proposed 6% deduction.
Age Action Ireland said the figures showed the continued importance of the State pension as an essential support for older people and having it linked to at least 35% of the average wage.
Ireland’s main advocacy organisation for older people is calling for at least a €5 increase in the state pension in the budget next week.
The contributory pension is €1,032 per month and the average rent is €1,304. In 2016, there were 15,883 people aged over 60 in the private rental sector. Last year, there were 6,663 people aged over 60 on the local authority housing waiting list.