Bank of Ireland survey reveals people are concerned about their pension savings and need help to make smart decisions.
More than two-thirds of pension holders in Ireland are worried that they’re not saving enough for retirement.
A recent Bank of Ireland survey revealed that only 25% of pension holders are confident that their pension will provide them with a comfortable retirement – leading to huge uncertainty surrounding the amount they’ll receive when they finish working.
“Even saving little and often now can make a big difference in the years to come”
The survey findings revealed that whilst the current cost of living challenges are front and centre of people’s minds, with 73% of people prioritising everyday spending over saving for their financial futures, over half of people (53%) would still advise their future selves to start saving as early as possible in order to prepare for a comfortable retirement. 8% of people are still intent on living in the here and now and on spending the money they earn.
Retirement planning needs to be easier to understand
One of the clear challenges at present is the ability of people to understand what they need to do with pensions, with 82% of respondents claiming that their primary ask of their financial advisers is to make retirement planning easier for them to understand.
The RedC survey also uncovered that only 15% of those sampled are happy with the amount of money they are currently setting aside.
“Our customers’ financial wellbeing is a key priority at Bank of Ireland, and it’s completely understandable that many people are currently prioritising their everyday spending,” said Bernard Walsh, head of Pensions & Investments at Bank of Ireland.
“However, our aim is to remind people of the importance of saving for the future, and our advice remains that people should still try to save, if they can afford to, in an effort to ensure they are not storing up more future financial difficulties. Even saving little and often now can make a big difference in the years to come, and the flexibility that pensions provide in allowing people design and adapt them to suit their own needs (coupled with tax benefits) always makes them a smart financial choice.
“We have over 100 pension advisors who can discuss people’s longer term needs over the phone or in our branches, helping them to create a plan that suits their financial wellbeing and lets them sleep at night,” Walsh said.
Only 37% of those surveyed know what income their current pension will give them upon retirement, with just 38% of those who do know what they’ll be getting actually happy with the projected amount. It all adds up to a worrying lack of clarity for many people who are clearly not happy with what their financial situations will be once they stop working.
However, the survey also revealed that just over one-fifth of people (21%) have ever sought financial advice in relation to their pension. To help people understand more about pensions and what they’ll need to do to achieve a comfortable retirement, Bank of Ireland’s Pension Pot free webinar series returns in September and October to bridge the knowledge gap about pensions and show how best to plan for the future.
“77% of those surveyed claimed it was important for them to be made aware of the flexible pension options available to them, so there is clearly an appetite there. Our aim with the webinar series is to provide a focus for people in this area, shine a light on options that make sense for them, and outline that investing in a pension is always a smart move no matter how much you can afford to set aside. Everyone’s financial wellbeing is dependent on making the right choices to suit their budgets, and the sooner people can start on this journey the better. It’s about saving only what you can afford for as long as you can and using the pensions tax advantages to make it easier.”
“My advice to everyone, not just young people, is that pensions are always a good investment in yourself, no matter what age you are. We have a pensions tax system that really helps, and pension saving is flexible – you can increase or decrease, start or stop when it suits. At the heart of this is planning and that is where good financial advice must be front and centre.
“Spending one hour with an advisor allows you to understand what options are available and then you can make an informed decision. That is where Bank of Ireland can help,” Walsh said.