Recent analysis by European insurer Aviva has shown that people in Mayo need to save an additional €9,100 a year to live adequately in retirement. Mayo’s annual pensions savings gap, the difference between what is currently being saved and expectations for retirement, stands at €550 million, the equivalent of an average €758 per capita per month of working age or €9,100 a year. These are among the findings of a comprehensive analysis of Ireland’s retirement landscape to date by the company.
The size of the gap varies for each individual depending on age and current pension provision, with those in Mayo who are 20 years old facing an average gap of €142 a month or €1,700 a year and those who are 60 years old facing a gap of €1,758 a month or €21,100 a year.
This clearly shows that starting to save at a younger age establishes a stronger and more manageable footing for retirement income, according to Aviva.
Aviva’s research assessed the gap between the savings that people retiring will need in order to maintain their standard of living in retirement and the actual pension provision they will have. It indicates that without action today to save more for retirement, many will be forced to accept a combination of working during retirement, retiring later, and accepting a significantly reduced standard of living.
In addition to this, by 2051, 50 per cent of the current Irish population will reach retirement age, a threefold increase in the number of people over 65 today. This means that the number of people working to fund those who are in retirement will drop from 6:1 to just 2:1, putting another huge strain on the economy and on people starting their working lives today.
“Many people find pension planning confusing with several factors to consider and understand and several choices to make,” said Mark Reilly, pensions expert with Aviva. “However, pension planning can be a lot simpler than people think.”
Further information from the Aviva ‘Pensions Made Simple’ booklet available for download from www.aviva.ie
