Minister for Housing, Local Government and Heritage, Darragh O’Brien, has refuted suggestions that a new auto-enrolment pension scheme is primarily being implemented in order to make provisions for the increasing number of older people who will still be renting when they reach retirement age.
Mr O’Brien told RTÉ’s Today with Claire Byrne that there are “many reasons’ for the new scheme.
“That (renting among older people) is not the reason for auto enrolment,” Mr O'Brien said.
“Let us be clear on that. There are many reasons (for auto enrolment). The main one is that we are trying to encourage people to make provision for their income at retirement.
“ To pay rent and to live yes. But if you are trying to say this is the reason the scheme is being brought in... Less than 50 per cent of people who are working in the private sector have any type of pension at all.
“The best way (forward) is that people join pension schemes earlier in their life particularly at twenty and twenty-one.
“The auto enrolment scheme helps. A very small contribution at the start early in your life matched by the employer. This is a really significant move by Heather Humphreys.”
Home ownership
Mr O’Brien said that the scheme is about providing pension coverage so that as best as possible people aren’t just relying on the State on their retirement.
“Why is that? Because they will need money to live. To pay rent and to pay mortgages and to buy food and all of those normal things,” Mr O'Brien said.
“Home ownership rates have plummeted in Ireland over the last twenty years. And that is why in Housing for All I am pushing very hard to encourage home ownership through our Affordable Housing Schemes and also through our Affordable Rental Schemes.
“We are going to have hundreds of additional tenancies in place where people are playing less than 50 per cent of what market rates are.
“So there is no question as people get older and are still renting and haven’t made provision, for whatever reason, and I am not blaming them, for rent that that is going to be a big issue in the future.
“We are tackling that in a number of ways. Cost rental will have a very significant impact on that. That didn’t exist 12 months ago.”
Meanwhile, the new scheme will see the Government pay €1 for every €3 an employee saves for their retirement. Employers will have to match employee contributions for up to six per cent of salaries below €80,000.
