How pension pots are being hit by cost of living
The cost of living is taking a major toll on people saving into their pension, a survey has found.
Some 60% of day-to-day living costs such as grocery and childcare bills are among the key reasons people are not saving enough for their retirement, the survey of more than 130 advisers showed.
A lack of knowledge or awareness of pensions is the prime reason Irish people are falling behind on their retirement savings, with 61% of financial advisers citing this as a key factor. Pic: Shutterstock
Ireland's high cost of living comes a close second, with 60% of experts saying these costs are to blame.
The other reasons people are not saving enough into their pensions are due to unaffordable housing (30%); a lack of interest in pension savings (28%) and poor budgeting & money management skills (22%).
Glenn Gaughran, of pension trustees Independent Trustee Company, said: 'Ireland is the second most expensive country in the EU, with prices for basic goods and services a staggering 42% above the EU average, according to a recent Eurostat report. Pic: Shutterstock
'Ireland experienced record inflation in 2022 and 2023, with inflation surpassing 9% on a number of occasions.
'While inflation today is a fraction of what it was back then, worryingly, it has started to creep up again.
'Let's not forget too that aboveaverage inflation has been recorded for many basic grocery items with butter prices up over 16% over the last year, milk up between 12% and 14% and beef up 13%,' the report says. Pic: Shutterstock
'So inflationary pressures are still very much a reality in Ireland and this has far-reaching consequences for Irish people, not just for affording the immediate day-to-day but also for saving and planning for retirement years.
'The message of why it's so important to save adequately into your pension needs to be communicated in a way which hits home to Irish people.'
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