In Australia, and now in the UK too, when you start a job you are automatically enrolled in a pension. Auto Enrolment it’s called.
Each new employee has the option to sign out of the pension but very few actually do it. Most think the idea of a pension is a good thing, I do too. Most people feel “well, I am not used to having the cash anyway, so I’ll quickly get used to not having it and if that means I then have money when I retire then ok!” They are good with that, makes perfect sense.
In Ireland, the landscape is entirely different. Employers are not obliged to enroll their employees in pensions. Pity.
As a result, very few wake up on a Monday thinking, “must sort out that retirement today!” So, the inevitable happens. Time is lost, life happens and affordability is always a concern because the challenge is now to spend money you have instead of spending money you never had. So, the pension coverage is Ireland is really poor in comparison. A real pity.
There are other factors of course. Jargon being one of them. As human beings who are consistently being sold to, it’s very difficult to buy into something without understanding it. But how can you understand something in an hour that took me 10 years to fully get my head around? So now you have to trust someone who knows what they are talking about. How do you find one of those? Word of mouth… aaaahhh! By the time you actually get this sorted years have typically slipped passed. A real bloody pity.
That is why pensions in Ireland at a basic level have poor levels of uptake and as a result too many people retire here without enough money.
Ultimately the people who are missing out are the people without the pensions in place often normal people like you and me.
One step the Government has taken to attempt to increase the pensions coverage in Ireland is to make employers provide access to a pension scheme to their staff. It’s an offence for an employer to not provide access to a pension plan to their staff and to facilitate the payment of this plan through their payslip.
Lots of employers will have schemes in place, some will have PRSA’s in place and lots of others will have none.
If you would like to start to put a few bob away for retirement, your payslip is the easiest place to do it. So ask.
If your employer would like to talk to someone about the technicalities of setting this up for you just give them my email address or phone number and I’ll be happy to help. But the key point is, that you should not be one of the ones that falls into the trap of missing out on the tax breaks that are available to you. So just ask!
As always if you need me for any of your financial planning needs please just give me a shout. You get me on email@example.com or call Kathy on 01 5310571 and we will be happy to have a chat through any of this.