Leinster women facing pensions timebomb

The Irish economic downturn is making consumers focus on reducing debt, saving for the future and making sure that they have appropriate pension provision, according to pension and investment experts, Friends First. Some 56 per cent of Leinster consumers surveyed in August say their key financial priority is to reduce or manage debt, while 48 per cent of consumers surveyed say they want to start a savings fund. Almost 63 per cent of Leinster people surveyed have a pension. However, the Friends First Pension survey reveals that Irish women are less well prepared for their retirement than their male colleagues, with 49 per cent of women admitting that they do not have a pension plan, in comparison to 25 per cent of men. According to the research carried out by Empathy Research on behalf of Friends First, 17 per cent of respondents don't know what kind of pension cover they have, and alarmingly this rises to 25 per cent among females surveyed. Almost a third of Leinster people who have a pension, contribute between six and 10 per cent of their salary to their pension annually. Once again, Irish men are contributing more than women. A total of 46 per cent of Irish men contribute between six and 15 per cent in comparison to 30per cent of Irish women. Overall, 27 per cent of respondents admit they don't know how much they contribute, as it is automatically deducted from their salary. This rises to 37 per cent among Leinster women. Shane Quinn, Friends First regional sales manager, said: "This research indicates that there is a real inequality between the sexes when it comes to pension provision. Our survey reveals that women are less well informed and therefore at a greater risk of not providing adequately for their retirement. This inequality is a cause for concern and points to a need for greater education among female workers." This survey highlights that the complexity of the current tax-based benefits is a barrier to increasing coverage with 35 per cent of those surveyed saying they did not fully understand the benefits available when taking out a pension. Worryingly, this figure increases significantly in the areas where the Government is specifically trying to increase coverage: 54 per cent amongst the young 25-34 age bracket and 50 per cent amongst those without a pension. The research also demonstrates a clear preference among Irish consumers surveyed for an alternative SSIA-type pension scheme over a tax benefit scheme. A total of 67 per cent of people surveyed said the introduction of an SSIA-type pension scheme would encourage them to either start a pension or increase their current pension contributions, versus 53 per cent said a tax benefit would encourage them to do likewise. "It is clear that perceived complexity remains a significant barrier to increasing private pension provision. The recently published National Pensions Framework Strategy document gives us an opportunity to address this in a significant manner. By tinkering around the edges with our pension system over the last number of decades we have created a system which alienates those who need pensions most. In addition to the fiscal changes which are needed so that we have an affordable pension system - consumers are clearly asking legislators to simplify things so that they can more readily understand what they are getting into," added Shane Quinn.