Research reveals barriers to pension take-up
Monday 9 May 2005: Minister Seamus Brennan launched National Pensions Action Week today in Government Buildings. This week is about spreading pensions awareness and encouraging pensions action.
Speaking at the launch, Anne Maher, Chief Executive of the Pensions Board said, “We have concentrated over the last 2 years on raising pensions awareness. The Pension Board’s Consumer Awareness Research Audits conducted at end 2003 and end 2004 confirm a significant increase in pensions awareness. At end 2003 the independent audit which we commissioned showed 60% awareness and at end 2004 this had risen to over 70%.”
This increased awareness is translating into a steady increase in pension coverage according to The Pensions Board, coverage now stands at 52.4% of the workforce and 59.1% of the particular target of the Board which is the over 30s in the workforce. There are also encouraging signs from Pensions Board information on PRSA sales such as the statistic that 68% of the PRSA sales up to end 2004 were in the 25-44 age category. “But whilst this increase is steady it is slower than we would like to see. This is why we are concentrating on encouraging “action” during this coming week and for the rest of 2005”, said Ms. Maher.
The Pensions Board’s recent independent Consumer Research shows that for those who do not contribute to a pension the main reasons given for not contributing were too young yet (25%), can’t afford it / too expensive (20%), not interested in pensions (18%) and the view that the spouse or children will look after them (14%). The research goes on to show that 87%of the sample taken said that the State old age pension would not meet their needs in retirement.
Other perceived barriers to pensions take up which were identified in recent research done by TNS Mrbi for Indecon Economic Development Consultants shows that pension products are seen as too complex. This was a view expressed by 66% of people in the age group 25 – 34 which is the group with the lowest coverage rate. 80% of this group also said that they would take out a pension if tax allowances were enhanced. “Affordability of pensions” was also identified as the reason for not taking out a pension by 64% of those surveyed in the TNS mrbi Survey and this is probably the most difficult obstacle to address.
The reasons why people are not taking out private pensions and the perceived barriers to this are something which the Board is examining and will have to address in the current National Pensions Review which the Board is completing for Minister Brennan. Whilst the Irish demographics are still favourable, the downturn will start in 20 years and it is imperative that we have sorted out our future retirement provision well before that date.
In the meantime, National Pensions Action Week is calling on people to take action to secure their income in retirement. During the week people can get information from The Pensions Board website www.pensionsboard.ie where there is a sample calculator to help work out the individual’s pension needs. People can also ring The Pensions Board on its helpline 1890 65 65 65 or approach any of the Pension providers who are arranging special information facilities during the week.
Schedule of Activity
Monday 9 May - Nationwide on Street distribution of Pensions Action Week Flyers in all cities and major provincial towns around Ireland.
Flag raising - Pension providers and social partners to hold a NPAW Flag raising ceremony at their respective headquarters.
Tuesday 10 May - Pensions day in the workplace
Pensions Board calls on all employers to hold a “Pensions Day in the Workplace” to cover information on pensions for new and young employees who currently do not have pension coverage and also focus on the adequacy levels of existing pension holders and their contribution levels and pension options.
Pensions Board to attend Chartered Institute of Personnel and Development in Ireland – EAPM Conference 2005.
Wednesday 11 May - Trade Unions Pension Day
ICTU Press Conference to launch their major document on Pension provision in Ireland. Also calling on all Trade Union officials and members to communicate the message of the importance of adequate pension provision.
Thursday 12 May - “Secure your Future” Day (National Pensions Sign Up Day)
Banks, Building Societies, Insurance Companies, Insurance Brokers, Post Offices etc to hold major in house “Pensions Promotions”
Pensions Board to hold a photo call to launch to start off the day in a City Centre location with ‘Celebrity Pensions Ambassador’
Friday 13 May - Pensions Adequacy Review Day Existing pension holders are encouraged and advised to review the adequacy of the level of contributions they are making to their pensions.
Construction Industry Monitoring Agency – Press Conference to launch their new promotional literature and awareness campaign and promote the importance and legal requirement for all construction workers to be included in the registered construction industry pension scheme.
Head of Information and Training
The Pensions Board
Tel: (01) 6131900
Project Manager- National Pensions Awareness Campaign
The Pensions Board
Tel: (01) 6131900
Jackie Gallagher / Mark Leech
Tel: (01) 4751444
(087) 237 1838