When it comes to saving for retirement through auto-enrolment, some people may benefit more than others.  
Winners: Starting Early and Saving Smart 
If you’re just starting your career or earning an income of less than €20,000 per year, auto-enrolment is a great chance to save for the future. Putting money aside for retirement early on, means it has more time to grow. Even small amounts can turn into a tidy sum over time. So, if you’re earning less, you stand to gain the most from this as auto-enrolment offers a great opportunity to start building towards a secure financial future. 
Potential Losers: Employers and Higher Earners 
For employers, auto-enrolment means extra costs. They have to contribute to their employees’ pensions, on top of other expenses like wages and bills.  If you are a high income earner, you might lose out on tax perks. Normally, when you put money into a pension, the government gives you a bit back in tax relief. But with auto-enrolment, you miss out on these savings as your employer or the Government won’t match any of your contributions on any income over €80,000. So, higher earners could end up with less money in their pockets compared to traditional pension plans. 
What Can Be Done: Taking Control of Your Finances 
To tackle these challenges, there are smart moves you can make. Employers might set up special pension plans that offer more choices for their staff. And higher earners could explore other pension options that still give them tax benefits.  By teaming up with financial advisors, everyone can find the best path forward. They can help craft personalised plans that make the most of auto-enrolment while keeping everyone’s financial goals in check.  
Planning Ahead for a Brighter Future 
Auto-enrolment brings changes, but with a bit of planning, everyone can come out on top. Starting early, making smart choices, and seeking expert advice can make all the difference in securing a comfortable retirement. So, whether you’re just starting out or further along in your career, taking steps now to secure your financial future is a wise move.    Have a chat with our experienced financial advisors for personalised recommendations based on your personal circumstance Source: gov.ie

Key highlights from the survey include: 

  • A whopping 98% believe the state pension is insufficient to support them in retirement 
  • 79% don’t know how much money they will need in retirement 
  • 56% have less than €100,000 saved which is less than the average amount in retirement savings in Ireland in 2024 
  • 68% do not track how their retirement funds are invested, which could put their financial future at risk. 
  • 44% expressed uncertainty about understanding the available retirement saving options.  
  • 79% admitted to not being prepared for the implementation of the upcoming pension auto-enrolment scheme. 
  In today’s busy world, planning for retirement often gets forgotten. But not being ready for retirement can cause big problems later on as highlighted by the latest findings from our Comprehensive Annual National Pension Survey.    The survey aimed to uncover insights into pension awareness and retirement readiness. The results, though revealing, painted a concerning picture of the general populace’s level of preparedness for life after work.   

Startling Knowledge Gap 

One of the most striking findings from the survey is the overwhelming lack of clarity regarding retirement finances. A staggering 79% of respondents admitted to being uncertain about the amount of money needed to sustain their desired retirement lifestyle. This knowledge gap can lead to significant financial stress and anxiety in later years, potentially resulting in inadequate savings or continued reliance on the state pension, which 98% of respondents deemed insufficient to support them in retirement.   

Average Retirement Plan Not Adequate 

The survey also shed light on the different degrees of retirement savings among respondents. Alarmingly, 56% reported having less than €100,000 saved, well below the average pension in Ireland for 2024, which stands at €111,000 according to the CSO. This indicates that a considerable portion of the population may face retirement with limited financial resources. Also, the fact that 68% of people don’t keep track of where their retirement money goes shows how important it is to manage money well.   

Lack of Preparation for Auto-Enrolment Scheme 

Another concerning finding is the lack of preparation for the governments upcoming pension auto-enrolment scheme. While 51% of business owners indicated awareness of the scheme, a significant 79% admitted to not yet initiating preparations for its implementation. This highlights a critical need for greater education and awareness campaigns to ensure individuals are adequately prepared for the changes ahead.   

Retirement Lifestyle: Embracing Travel and Quality Time 

Despite the financial challenges associated with retirement, respondents expressed a strong desire to prioritise experiences such as travel and spending quality time with family and loved ones. This highlights the importance of not only financial planning but also lifestyle planning to ensure a fulfilling retirement.    In response to these findings, Paul Merriman emphasised the importance of active engagement in retirement planning and investment management. He stressed the need for individuals to bridge the gap between retirement aspirations and financial preparedness through informed decision-making and strategic planning.    In conclusion, the findings of our National Pension Survey serve as a wake-up call for individuals to take proactive steps towards securing their financial future. By addressing the knowledge gap, increasing savings, and preparing for upcoming changes, individuals can start their retirement journey with confidence and optimism.    Have a chat with our experienced financial advisors for personalised recommendations based on your personal circumstance
This article talks about something that’s on the horizon for all of us: auto-enrolment.     You know that pension scheme proposal that’s been buzzing around? We think it’s important for business owners like you to understand the implications it may have.    So, what exactly is auto-enrolment?     Well, it’s a plan to encourage more people in the private sector to contribute to their pensions. Right now, only about 35% of workers in that sector are actively saving for their retirement. The government is aiming to raise that number to 70% and even higher. And we all know how important it is to have enough money set aside for the future.    However, as cool as the idea of increased pension funding sounds, the terms of this impending auto-enrolment scheme may not be ideal for everyone, especially when compared to an employer-selected occupational pension scheme.     Let us explain.     The auto-enrolment scheme is set to roll out by the end of 2024 and will target employees aged between 23 and 60, who earn €20,000 or more across all employments, and who aren’t already contributing to an existing employer pension scheme. The interesting thing is that eligible employees will automatically be enrolled, making it easier for them to save for retirement.     Under the proposed scheme, which is still subject to specific draft legislation, both employers and employees will contribute matching amounts.     In the first year, the suggested contribution rate is 3.5% of the employee’s salary. This means the employer and employee each put in 1.5%, while the state adds an additional 0.5%.     Now here’s where things get interesting. With auto-enrolment, the state contribution serves as a 33% boost to the employee’s contribution instead of the usual income tax relief. This little change can have big implications, especially for those earning at a higher tax rate. They might end up losing out on some much-needed tax relief when compared to an occupational pension scheme.     The auto-enrolment scheme’s contribution requirements are expected to increase every three years over a phased-in period. Within ten years, the total contribution is projected to reach 14%, with employers and employees contributing 6% each, and the state chipping in an additional 2%. It’s important to note that these contributions will only apply to earnings up to €80,000. Earners at the higher rate of tax will end up with a significant loss of tax relief under enrolment when compared to an occupational pension scheme.    Now, we know this might all seem a bit overwhelming, but don’t you worry! We’re here to help break it down for you.     Here are our expert opinions on the matter:    Firstly, one drawback of the proposed auto-enrolment scheme is the limited selection of investment funds and the lack of advice provided to employees. We believe it’s important for you to have options and guidance when it comes to investing for your future. That’s why setting up your own pension scheme allows you to choose the investment provider and the advising brokerage. You’ll have the flexibility to change providers if needed, and it promotes healthy competition and better outcomes for you and your employees.    Another limitation of auto-enrolment is that it restricts early access to pensions until normal retirement age. In contrast, an occupational pension scheme allows early access upon leaving service, potentially as early as age 50. We think flexibility is key, and having the ability to access your hard-earned pension earlier can be a game-changer for some.    Our advice is to seek guidance on establishing your own occupational pension scheme before auto-enrolment becomes mandatory. By doing so, you can avoid the need to invest in a mandated arrangement. Plus, you’ll have the advantage of customising your pension offering, enhancing employee engagement, and demonstrating your commitment to their well-being.     While we applaud the government’s efforts to boost pension funding through auto-enrolment, it’s not a perfect solution. We believe that those who proactively establish their own pension scheme will enjoy strategic advantages in administration, investment choice, cost management, compliance, and attracting and retaining top-notch talent.    If all this auto-enrolment stuff has your head spinning or if you simply want more information, we’re here for you!     Our team of expert pension advisors will help you understand how this pending change may affect your business. Don’t hesitate to reach out to us!    Have a chat with our experienced financial advisors for personalised recommendations based on your personal circumstance   Source- Gov.ie & Zurich.ie  
Choosing a protection policy can be confusing. From mortgage protection to serious illness cover, knowing your options is key.      Mortgage protection is like a safety net for homeowners in Ireland. If you pass away while still paying your mortgage, this insurance clears the remaining balance. This means your family won’t have to worry about paying off the mortgage balance if something unexpected happens to you. It’s a way to ensure that they can stay in their home without financial stress. Getting mortgage protection isn’t just for your own benefit—it’s also about making sure your family is protected if something happens to you. It’s a smart move to keep your family’s home safe and secure, even if life takes a difficult turn.    Serious Illness cover is a valuable addition to your financial plan. If you’re diagnosed with a serious illness that is covered within the conditions your policy, it pays out a lump sum. This lump sum can be a significant financial relief during challenging times, helping cover medical expenses, mortgage payments, or other bills. It offers peace of mind, knowing you have financial support when you need it most. With Serious Illness cover, you and your family can focus on recovery without worrying about the financial strain.    Term Assurance is an easy and affordable way to help your family financially. You choose the length the policy remains active for, for example until your mortgage is paid off or when your kids reach a certain age. You pay a set amount each month, which makes it easy to budget.  If you die during the policy term, the life company gives your family a lump sum of money. They can use this money to pay bills, like the mortgage or everyday expenses. It gives you peace of mind, knowing your family will have support even if you’re not there.  Term Assurance is important for financial planning, especially if you have people who rely on you. It ensures your family is looked after financially when they need it most, giving them stability and security.    Whole of life insurance covers you for your whole life, so your family gets a payment when you die. It’s different from term insurance because the term is indefinite until you pass away or cancel your payments. This insurance gives your family financial security in the future. The money they get can pay for things like funerals, debts, or help them out financially for everyday needs. Even though whole of life insurance costs more than term insurance, the amount you pay stays the same for your whole life. So, you don’t have to worry about it getting more expensive as you get older or if you get sick. Having whole of life insurance is a smart way to plan for the future and make sure your family is taken care of when you’re not around anymore.  However keeping your income safe is really important for your finances, especially if something unexpected happens, like getting sick or injured. This is where income protection comes in.    Income Protection replaces a portion of your income if you’re unable to work due to illness or injury. It provides a monthly payment to help cover living expenses, ensuring financial stability during periods of incapacity.       Example of income protection:  If your gross salary is €45,000, you can cover 75% of it, which is €33,750. Subtract the state illness benefit of around €12,064. You’ll be left with €21,686 or €1,807 monthly cover from your insurer if you’re unable to work due to illness or injury. If you’re self-employed, you won’t receive state illness benefit*, so you can cover the full 75% yourself.    There is also a huge benefit to having Income Protection and that is Tax Relief. If you pay income tax, you can get full tax relief on all the premiums you pay for income protection. This means you can reduce your tax bill by the same amount you pay for the premiums, up to 10% of your total income in Ireland. Just remember, it’s up to you to claim this tax relief. And if your tax or job situation changes, it could affect your eligibility for this relief.  Different factors can influence the price of your income protection premium:    Your Income: Higher pay means higher premiums because it’s designed to cover your earnings.    Coverage Amount: You can choose to cover up to 75% of your income, minus state benefits. Deciding how much to cover affects your premium.    Occupation Different jobs have different risks, which affect your premium:    High-risk Occupation (Construction Worker): 
  • Construction workers typically engage in physically demanding tasks at elevated heights or in hazardous environments. 
  • They face higher risks of workplace accidents, injuries, or long-term health issues due to exposure to dangerous equipment, materials, and conditions. 
  • As a result, insurance premiums for income protection may be higher for construction workers due to the increased likelihood of making a claim. 
  Low-risk Occupation (Office Worker): 
  • Office workers typically perform sedentary tasks in a controlled and safe environment. 
  • They have minimal exposure to physical hazards or workplace accidents compared to construction workers. 
  • Office workers are less likely to experience work-related injuries or health issues, leading to lower insurance premiums for income protection. 
  Deferral Period: How long you wait before getting paid affects your premium. Longer waits mean lower costs, but shorter ones mean higher costs.    Retirement Age: How long you need the policy affects your premium. Closer retirement means higher premiums.    Smoking: Smoking or using nicotine products raises premiums by 50% if you’ve used them in the last year.    Health and Age: Your medical history and age impact your premium. Healthier and younger people pay lower premiums.    Deciding which protection policy is best for you depends on your individual situation, what you want to achieve, and how much help you need. Each plan has its own benefits to keep your income and finances safe.  Talking to an expert can help you figure out which plan is right for you.    Protection policies are subject to the disclosure of material facts and medical underwriting of the applicant which will determine the level of cover available to the applicable (where applicable) and the cost of that cover.      Have a chat with our experienced financial advisors for personalised recommendations based on your personal circumstance *Some self-employed people may qualify for state illness benefit  

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