Quarter of workers ill-informed about state pension

We're "sleepwalking into retirement", according to new survey....

One in four Irish adults are unaware of the size of the State pension, despite the fact that 44% of us will depend on it later in life.

A new survey from Friends First found that people are generally more concerned about holidays and home improvements than making long-term pension plans, as workers underestimate the cost of living in retirement.

The Friends First 2016 Pension Index's also found that 73% of people without a private pension are worried they won't have enough to live on when they retire. People expect their cost of living to half in retirement. For the people that will be dependent on the State pension of €230 per week, this leaves a disposable income of just €40 per week.

Those with a private pensions are also over-estimating the level of income their current funding would provide. The average annual contribution was €2,946, even though the average expected retirement income expected was €19,666 per year.

Pensions advisor Eoin McGee says now is the time to invest in a plan and reap the benefits:

"Any time between now and the end of October, you can actually make a contribution into your pension. If you're a PAYE worker, it's actually even more attractive.

"If you could put a €1,000 into your pension today and you're a PAYE worker, you will get a cheque back from Revenue for €400. There's nowhere else I know where you can turn €600 into €1,000 automatically."

The findings come as the Government seems likely to commit to increasing the old-age pension by €5 in Budget 2017. This would come at a cost of €170 million to the Exchequer.

Fianna Fáil social protection spokesman Willie O’Dea called for the increase over the summer, though it was not formally adopted as a bottom line demand. The Independent Alliance has also called for a minimum €5 rise.