While Irish adults are becoming more sanguine about their retirement prospects, 42% agree they are going to have to work beyond the normal retirement age in order to fund their retirement. The equivalent figure in 2013 was 52%. This is among the findings of Aviva’s latest Consumer Attitudes Survey (CAS) which has been done every year since 2004 and is based on a sample of 1,000 adults across Ireland.
Those reporting most scepticism about their financial preparedness for retirement are in the 45 to 54 age cohort with more than half (52%) believing they will work beyond the normal retirement age. The current qualifying age for the State pension is 66 years old, which is due to rise to 68 by 2028.
Asked if they would like to work, either full time or part time beyond the usual retirement age, 46% of consumers agreed they would, although that figure has fallen from 52% in 2010. This figure rises to over half (53%) of those surveyed in the 45 to 54 age cohort.
Ireland’s consumers stand out in their willingness to work beyond retirement age. In the UK, 34% of consumers agreed they would like to work, either full time or part time beyond the usual retirement age, with 22% the equivalent figure in France.
Among respondents aged 45 to 54, almost two thirds (62%) are worried they won’t have enough money when they retire to provide an adequate standard of living. Despite this anxiety, however, only 42% of respondents in this age group agreed they were taking steps to ensure they have an adequate income during their retirement. This compares to 39% among all respondents.
Mark Reilly, Aviva’s Pensions Product Manager said: “If people want to enjoy a work free retirement then it is imperative that they start contributing to a pension at a much earlier age. Our research findings show that just 21% of young workers report to be regularly setting aside money for their retirement. By way of illustration, if you start saving at 25 and you would like to retire with a pension that is equivalent to 50% of your pre-retirement income at age 65, you would need to be saving about 40% of your income each year. If you leave it until you’re 45 to start saving the percentage of your income that you need to save jumps to nearly 77%.”
He noted that over the last 5 years, Aviva’s Consumers Attitudes research has found that on average, a third of pre-retired consumers agreed the only realistic way to save for retirement is if required by law to do so. “Ireland has the youngest population in the EU. Nonetheless, as people live longer, the capacity of the State to maintain the current level of State pension will be challenged. That is why it is crucial we get young workers to start saving for their retirement. We’ve been talking about it for long enough; we need to move to action on this issue early in the life of the next government,” concluded Mark Reilly.
The June 2014 CAS survey asked those who have retired about their experiences and found mixed fortunes. Health problems were reported by 44% while the same percentage reported they were finding it much hard financially since retirement (44%). Approximately one fifth (22%) said they would like to go back into the workforce but were unable to find a job because of their age, while 23% said they missed being part of a team after retirement. On the up side, almost half (48%) said they had a better social life with more time for hobbies, sports and friends and 40% said they were now able to spend more time with their family. Supporting the truism that there is more to life than work, 37% said they were so busy since retiring that they didn’t know how they ever had time to work.