Average monthly pension contributions from Irish Life customers increased by 30% since 2010, while less than one third (30%) of pension holders are women.

These and other findings were published this week in a study carried out by Irish Life of its personal pension customers. The results are significant because Irish Life is the country’s biggest life and pension company, and thus provides an accurate yardstick of overall pension behaviour.

Irish Life found that the average pension contribution during the first half of this year was €562 per month, compared with €372 per month in 2010. In the last five years alone, the average contribution on new personal pension plans increased by over 30%.

According to Irish Life, the increase can largely be explained by the fact that during the economic downturn many people in their 30s and 40s put off starting to save for a pension until later in life.

That also meant that those who were starting late needed to put more in, as they had less time to establish a comfortable retirement fund.

In Association with

Other insights furnished by Irish Life’s study emphasise the gender disparity and regional differences around pension planning:

• Women nationally represent 30% of Irish Life pension customers;
• Dun Laoghaire-Rathdown residents have the highest pension contribution figures, saving almost €100 a month more than the national average for Irish Life’s personal pensions of €343;
• Sligo residents have the lowest pension contributions, saving €120 a month less than the national average;
• The highest monthly pension savings overall (for men or women in any county) are by women in Cork, at €518 per month. The second highest county for women is Waterford at €427 and Galway at €409;
• For men, the highest pension contributors are in Dublin at €437 per month, followed by Galway at €387 and Limerick at €363 a month.

Starting Younger

Gerry Hassett (pictured above), MD of Irish Life Retail, said that 2015 could be the first year since the downturn to see a fall in the average age of people starting pensions.

“In 2008, the average age of a new pension customer was 35. This increased to 42 years old during the recession, as Irish people in their 30s focused on essential financial payments such as mortgages and other shorter-term commitments.

“However, the average age stopped rising last year and it looks like it will fall to 41 this year. We have also seen a significant increase in the overall market for personal pensions, with sales up by 18% for the first half of 2015,” he said.

Previous research commissioned by Irish Life indicated that almost one in two working adults (49%) still do not have a private pension, with this figure increasing to 54% for 24-35 year olds.

Half of those without a pension cited ‘affordability’ as the main reason for not having one, while almost a fifth of people though they were too young to start a pension.

Said Hassett: “Although we are encouraged by the market changes in 2015, we’ve also seen from the recent ESRI study that there’s still a large number of people, as many as two-thirds of those over 50 years, who still don’t understand how pensions work.”