Have you been saving?
We’ve known for a while that there’s a growing pension crisis in this country with the State pension under financial pressure and fewer than 50% of employees contributing to a private pension - Aviva Insurance has just put some scary numbers on the issue.
In its “Mind the Gap Report”, Aviva estimates that the gap between the pension savings of Irish people – including the State Pension – and the retirement income we require is close to €28bn per year.
The report says that the current generation of retirees who are due to reach retirement age between 2017 and 2057 will have to save an additional €12,200 (€1,017 per month) extra.
The gap is not only huge but is widening and is now the second largest after the UK of the eight European countries included in the Aviva survey.
Aviva says one solution is to introduce auto-enrolment – whereby employers automatically deduct a pension contribution from salaries unless they are told not to. This has been done in the UK and they’ve narrowed their gap by 4% as a result.
Aviva Ireland General Manager, Gary Marshall accepts that fees have to be simplified and made competitive.
"There are all kinds of charges in these products nowadays, we're taking a serious look at simplifying that so people can understand it better and understand what they are facing," he told Newstalk.