A third of workers aged between 20 and 69 have no private pension cover and will depend on a State pension in retirement, a new report shows.
Figures from the Central Statistics Office (CSO) reveal there has been a slight improvement in private pension cover in the last year, rising from 66 per cent in 2022 to 68 per cent in 2023.
The maximum State pension is currently €277.30 a week for those aged 66 to 79 or €287.30 a week for those aged 80 or older.
Over two-thirds of workers have some form of pension cover outside of State Pensionhttps://t.co/zn9lvOwHi2#CSOIreland #Ireland #Pensions #PensionCoverage #Earnings #Employment pic.twitter.com/iplMzsO4Zs
— Central Statistics Office Ireland (@CSOIreland) February 26, 2024
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Of the people in employment in July, August and September last year, more than two-thirds had pension coverage of some form outside of the State pension.
The Pension Survey figures show that pension coverage remained highest among workers aged 45 to 54, which remained unchanged from 2022.
It remained lowest among young workers with 33 per cent of workers aged 20 to 24 years having some form of pension coverage.
For employees with occupational pensions from their current employment, the number with “defined benefit” pensions decreased in 2023 – 30 per cent compared with 32 per cent in 2022 – while the number with “defined contribution” pensions increased to 66 per cent from 62 per cent in 2022.
For those workers with no occupational pension coverage from their current employment, half of workers stated that their employer does not offer a pension scheme.
Of employees with no supplementary pension cover, over four in ten cited affordability as the main reason, while similarly, a further 43 per cent stated they never got around to organising it or would organise it at a future date.
The State pension was cited as the expected main source of income on retirement for almost six in ten workers with no pension coverage.
Of respondents who are eligible for the Auto Enrolment Scheme, one in five were aware of it, and of these, over seven in ten said they would stay in the scheme if automatically enrolled in it, up seven percentage points on the same period in 2022.
Maureen Delamere, CSO statistician, said: “Pension coverage in 2023 followed the same trend as in 2022, where pension coverage was lowest among younger workers, although supplementary pension coverage among this age group has risen in recent years.”
One third of people in the 20 to 24 age group had pension coverage of some form in 2023, up two percentage points on the same period in 2022.
The figures show that the number of people taking out supplementary pension coverage increases with age.
Nearly three-quarters (73 per cent) of the oldest age group surveyed, people aged 55-69, had supplementary pension cover.
Almost half of older workers aged 55 to 69 have been in their current occupational pension scheme for 20 years or more, compared with just over one in 12 people aged between 35 and 44.
Analysis of pension coverage by broad occupational groups shows that workers whose occupation was classified as professionals had the highest pension coverage rate at 83 per cent, whereas just 48 per cent of workers whose broad occupational group was skilled trades had pension coverage.
The economic sector with the highest pension coverage was public administration and defence: compulsory social security, while the lowest coverage was in the accommodation and food service activities sector.
Of employees who had no supplementary pension cover, more than four in ten cited the affordability of pensions as the main reason for not having pension cover, a further 43 per cent stated they never got around to organising it, while 9 per cent said they would organise pension provision at a future date.
For workers, including self-employed, the state pension was cited as the expected main source of income on retirement for almost six in ten workers with no pension coverage, while one in six had not yet decided on this issue.
