Ireland’s savvy savers no longer splash the cash as retirement planning takes hold

28th October 2008

• Half of population not prepared for recession as credit crunch tightens
• Just 6% believe Government will provide for them in retirement
• 45% now squirreling money away for retirement years

Half of Ireland’s population is not financially prepared for recession and do not have enough savings to cope with the unexpected.And almost 60% of people are worried about having enough money in retirement – this rises to almost 70% among those in the 25 to 34 age group. These were some of the findings in new research from leading pensions and investment company, Hibernian Life & Pensions (Hibernian).Following a decade of boomtime spending, consumers in Ireland are no longer splashing the cash and only a little over one third of adults would rather spend for today than save for tomorrow.Instead we’re rapidly becoming a nation of savvy savers focused on having a nest egg for retirement.

The dash to save for retirement is fuelled by fears about Government funding in retirement and not having enough to fund an adequate standard of living in retirement.Just 6% of people in Ireland and 3% of those aged between 35 and 54 strongly believe that the Government will provide an adequate level of income in retirement.And with the state pension in Ireland at just Euro223.30 per week, investing now for retirement could mean the difference between standing on the breadline or eating in the cake shop. However the Hibernian research also shows that belt tightening and saving is now the order of the day.45% of adults are regularly setting money aside for use when they retire and this figure rises to almost 60% for those in the 45 to 54 age group.

By investing in a pension now Ireland’s savers are also taking advantage of the significant tax relief on pension contributions.This is particularly relevant for the self-employed who must pay and file their tax returns online by the 17th November.

Speaking about the findings, Mark Reilly, Pensions expert with Hibernian said: “Ireland is forecasted to have over 1.1million old people by 2036.This means that anyone who is in their mid-30’s today, having lived through the boom of the past decade, will be living on the state pension, plus any private pension income, by 2036.The weekly state pension currently stands at just Euro223.30 per week providing a bare bones safety net for Ireland’s grey army.With people now switched on to the need to plan for retirement, the research clearly shows that consumers are making up lost ground despite the financial market turmoil.”

To respond to consumer fears about financial market turbulence, Hibernian has also launched the Safe Haven Fund.The Hibernian Safe Haven Fund was specifically designed to offer customers a distinct stepping-stone to investing in equity markets while also maximising the tax benefits of taking out a pension.The first step enables customers to start a pension and place their funds on secure deposit with a guaranteed return of ECB + 1% until September 2009.Customers can then take additional small steps toward investing in a range of Hibernian equity market funds as their confidence in investment markets returns to normal levels.

Mark Reilly of Hibernian added, “Despite the global market meltdown, Hibernian’s research also shows that Ireland’s investors are among the shrewdest internationally with almost half of consumers in Ireland seeing the value of investing for the future despite the turmoil in financial markets.55% of consumers have also said they are now much happier to invest for the future rather than spend for today.Investors in Ireland join their peers in the US and Canada at the top of the table for seeing the value in investing for the long term with Dutch, Polish and Lithuanian investors bringing up the rear guard.

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Note to editors

• Hibernian is one of Ireland's largest and most successful financial organisations with activities spanning general insurance, risk management, pensions, life assurance, health insurance and personal financial services.
• Hibernian is owned by Aviva plc, the world’s fifth largest insurance group.
• Hibernian’s full year results for the year ended 31st December 2007 produced an operating profit of €352.9m (2006: €188.9m).
• Hibernian occupies the number one position in the General Insurance market and a top three position in Life & Pensions and Health Insurance.

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