Pensions – it really is a case of Fail to Prepare…
Something we are told from a very young age is that it is never too early to start planning for the future. As true as this may be it is something that falls largely on deaf young ears as we move on with our lives without thinking about that distant future of our elders. As you progress in your working life, this statement becomes increasingly true as no matter what stage of your career you are currently at, it is vital to plan for a future in which you will no longer be earning.
Recent reports show that the majority or workers are not saving towards a pension for their futures. As we have discussed previously, the cost of living, renting and buying property continues to grow so it should come as no surprise that many workers find themselves unable to set aside money for distant days ahead as wallets get increasingly light. There has been a lot of speculation recently that we may be heading towards a time-bomb in terms of pensions, so the news that only 47% of workers are contributing to a pension only compounds this fear and places the future of the State pension in question.
There have been discussions that the Government is to roll out a mandatory scheme for pensions by 2022, but this still leaves a period of 3 years during which workers could take matters into their own hands and begin making contributions. Perhaps unsurprisingly, it appears that the worst uptake in pension contributions is among younger workers, who again are most likely to be stuck in the rental trap at present. Social Policy Officer with The Irish Congress of Trade Unions, Laura Bambrick has said that too little is being done to encourage lower- and middle-income workers to contribute.
“Tax relief has failed as a policy instrument for encouraging low and middle-income earners to save enough towards a financially secure retirement, and there is no legal obligation on an employer to provide or contribute to a pension scheme for employees.”
Funding issues for State Pensions are likely to become an increasing concern for the future if pension contributions don’t soon become a standard, and with many employers also not making any contributions for their employees, something likely must change and urgently.
If you are interested in beginning your own pensions journey, here are some tips from us.
As with any budgeting system, it is essential to first work out how much you need to be setting aside. There are a great many online calculators that can assist with this. It is also important to consider your own currently monthly budget.
There are so many options to choose from that this can be daunting but take the opportunity to speak to some advisers and ensure that you find the right pension plan for you.
Speak with your Employer:
It is possible that your employer may be willing to match your contributions or make some contribution for you, it is important to find out if this is a possibility in your company.
If there are tax breaks available, be sure to make use of them.
There are many small ways to make weekly savings, implementing these may mean that your pension contributions do not leave such a gaping hole in your pocket.
Should you have any concerns or queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to help.
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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY