Majority expect to have to rely on the State pension when they retire

MOST workers expect to have to rely on the State pension when they retire.

ome 57pc of workers say the State pension will be their main source of income.

The State pension was cited as the expected main source of income on retirement for nearly six in ten workers with no pension coverage, Central Statistics Office research has found.

The Government is planning to bring in an auto-enrolment pension scheme to supplement the State pension for thousands of workers who have no staff or private pension plan.

However, this has been subject to years of delays and is not due to begin being rolled out until next year.

The survey by the CSO found that more than one quarter of workers have yet to decide what they main source of income is going to be when they give up work.

Some 66pc of workers between the ages of 20 and 69 have some form of pension coverage outside the State pension.

But the figure is heavily skewed by the public service where pension coverage is close to 100pc.

CSO statisticians found that pension coverage was greatest among workers aged 45 to 54 years, while it remained lowest among younger workers.

Only three in ten workers aged 20 to 24 years had some form of pension coverage.

For employees with occupational pensions from their current employment, more than three in ten had defined benefit pensions.

These schemes promise a set pension at retirement based on years of service and final salary.

Many of them have been shut down as they are hugely expensive to run.

Some 62pc of occupational pension for those still in work are defined contribution one.

The payout from these depends on the amount of money contributed, how the fund has performed and the length of time that contributions have been made into it.

For those workers with no occupational pension coverage from their current employment, more than half stated that their employer did not offer a pension scheme.

Affordability was cited as the main reason by 40pc of employees who said they have no supplementary pension cover

Some 47pc said they never got around to organising it or would organise it at a future date.

One in five of those eligible for the Government’s promised auto-enrolment scheme said they were aware of it.

Of these, almost two thirds said that they would stay in the scheme if automatically enrolled in it.

CSO statistician Maureen Delamere said: “The results in this publication cover pension provision outside of the State pension.

“Of persons in employment in Quarter 3 2022, around two-thirds (66pc) had pension coverage of some form (outside of the State pension), remaining unchanged from 2021.”

An analysis of pension coverage by broad occupational groups shows that workers whose occupation was classified as professionals had the highest pension coverage rate.

In contrast, workers whose broad occupational group was skilled trades had pension coverage.

The economic sector with the highest pension coverage was public administration and defence, or the public sector.

The lowest coverage was in the accommodation and food service activities sector.

Glenn Gaughran, head of business development with Independent Trustee Company, said that the greatest predictor of whether a worker will have a private pension or not is if their employer offers one.

He said the CSO pension coverage report shows that more than half of the workers who are not saving for a pension are in that position because membership of a company pension scheme is not an option for them.


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