Is the State likely to provide your pension expectations?

At the recent IAPF Annual Defined Contribution Conference some of the findings of the IAPFs Financial Literacy and Pensions Research Report (April 2012) were announced.  This report revealed that almost half of all adults (47%) believe the state pension will be their main source of income in retirement. When asked how much of their current income they think they will require in retirement below were the responses.

Level of current income required in retirement	Percentage of respondents
Less than 30%	11%
31-50%	22%
51-70%	31%
More than 70%	23%
Don’t know	12%

The current state pension is just shy of €12,000 per annum or about one third of the average wage(€35,849, CSO 2011).  The findings from the IAPF report highlight the huge gap between what people expect to have in retirement and what the State will actually provide. This gap is likely to get wider with increasing pressure on the State to reduce costs. 

This means that people will either have to make a reduction in their post retirement income expectations or increase their private pension savings dramatically.

Niamh Quirke

Independent Trustee Limited