Pensions 'should be compulsory' - survey
More then 60% of people believe it should be made compulsory to start a pension, a new survey revealed today.
People aged between 25 and 39 years will be targeted in an intensive advertising campaign this week as a bid to encourage people to begin providing for their future gets under way.
As National Pensions Action Week kicks off, Ann Maher, chief executive of the Pensions Board, said Ireland will undergo a dramatic change in population profile over the next 50 years.
“At present there are over four workers contributing to the support of every pensioner. This will fall to 2.7 in 2026 and to less than 1.5 workers per pensioner by mid century. Clearly this will present serious problems in the future if those without a private pension don’t take action in time,” she said.
Ms Maher said ensuring pension provision into the future was a serious issue facing the entire country.
“This could be done through the current voluntary private system, which would mean more people contributing and in most cases considerably higher levels of contribution, or the introduction of some form of mandatory pension provision requiring everybody to set money aside for their future,” she said.
“The recent Pensions Board report on the National Pensions Review sets out the options starkly and these are out there for consideration by Government and Social Partnership.”
Around 64% of respondents to a survey conducted by the Pensions Board recommended it be made compulsory to start a pension. Almost half of all those questioned said they would be willing to pay a higher PRSI rate to provide for compulsory pensions.
The research for the Pensions Board, which was carried out among 1,000 people aged between 20 to 54 years, found 27% of all respondents who were SSIA holders said they would contribute part or all of their SSIA into a pensions scheme.
“It’s encouraging to see that there is an increase in the number of SSIA holders who said they will be contributing some to their pension but this needs to increase even further.
“The Government introduced in the 2006 Finance Act, a new pension incentive to encourage those on lower incomes to roll over some or all of their SSIA proceeds into an approved pension product and to continue the savings habit with regular savings into a pension,” she said.
The survey revealed four out of five people believe the State Old Age Pension would not meet their needs in retirement.
The reasons given for not taking up a pension included being too young, unable to afford it, felt it was unnecessary and some said their husband or wife would look after it.
A debate will take place among stakeholders next Friday in Dublin Castle on the future of pensions in Ireland.
