The extent of this crisis cannot be understated, and it’s the opinion of the National Pension Helpline that workers should be preparing for their eventual retirement, as if they knew for certain that the State pension wouldn’t exist, it is far more prudent to do so. Unfortunately, for those in the workforce today, the Irish State pension system is starting to look more and more like a State sponsored ponzi scheme, robbing Peter to pay Paul, where Peter is the Irish worker and Paul is the Irish retiree.
So what’s the solution? Private pensions. Now more than ever before you need to take responsibility for your retirement planning. A private pension allows you to invest money periodically over the course of your working life, with the ultimate goal being a pension pot far in excess of what the State pension could ever provide. By reading our other articles on Defined Contribution Pension Schemes and Personal Retirement Savings Accounts (PRSAs) you’ll learn more about two of the most common ways to get started with a private pension in Ireland. The best part? There are extremely valuable tax benefits associated with investing in a private pension in Ireland.
So not only are you looking out for your future self, but you’re also keeping more money in your pocket and less in the taxman’s! You can learn more about the tax benefits of pension investing here.
The Government has recognised that, in addition to the four options which we highlighted above to salvage the State pension, another very important solution is increasing the amount of private pension coverage which workers have. Because of this, a system of pension auto-enrolment will be brought into effect from 2024. Ireland is the only OECD country that does not yet have such a system in operation. Under this system, Irish workers will automatically be opted into a private pension scheme at a predetermined percentage of their salary (as opposed to the current system which requires workers to voluntary opt-in on their own accord). It is the National Pension Helpline’s opinion that the reader should not rely on this system for their private pension provision. The sole reason being that the percentages at which workers will be opted in are far too low to provide a sufficient nest egg at retirement age. Don’t rely on the Government, take matters into your own hands.
If you’d like to learn more about any of the information mentioned in this article, or if this article has inspired you to take control of your pension, the National Pension Helpline has a panel of vetted pension experts who can assist you with any queries you may have. Simply submit your information through the platform and you’ll be matched with the advisor best suited to your situation.