Normally, a person in retirement in Ireland owns their own home, having paid off their mortgage.
This allows for a lower cost of living as you will not have a mortgage. Dependent children have normally left home by the time you reach retirement age also and this certainly reduces costs.
However, there is a new trend in home ownership and a growing housing crisis which adds to future inequality of pension provision.
We are seeing few solutions to the housing crisis. The price of homes continues to rise, the number of homes available still falls short of what is required and the cost of a mortgage continues to climb.
This has created a cascade of inequality which will reveal itself in future decades.
As individuals buy homes later and take out a mortgage for longer to reduce monthly repayment amounts, they are locking themselves into a situation whereby they may still be paying their mortgage in retirement.
Others may find it impossible to ever buy a home and will remain in rental accommodation throughout their careers and have to pay rent in retirement.
As this is a generational issue we will also see more children remaining in the family home as adults, continuing as a cost burden on their parents and not buying their own property. This has the potential to create a large inequality landscape.
A person that does not own their home outright, has dependent children and does not have a private pension arrangement, will be in a very vulnerable position.
Their income on the State pension will not be enough to cover the basic cost of living that they will face.
For this reason it is imperative to plan now for your retirement, regardless of what stage of life you are in. Even if you are in the later stages of your career you can create significant benefits that will carry you through your retirement.