Hibernian Life and Pensions has launched a consumer guide to the government’s new legislation on personal retirement savings accounts (PRSAs).
Hibernian Life and Pensions has launched a consumer guide to the government’s new legislation on personal retirement savings accounts (PRSAs).
The guide reveals some interesting statistics on the pension situation in Ireland today. Only a quarter of Irish adults working in the private sector have made some provision for their retirement, which means that 75 per cent will potentially end up relying on the meagre state pension.
Pictured at the launch of Hibernian Life & Pensions’ new guide to Personal Retirement Savings Accounts is Ian Veitch, director of marketing and product development at Hibernian. Across Europe birth rates are falling and governments are waking up to the fact that populations are growing older and the state will be unable to sustain them into old age. In Ireland, due to the higher birth rate until the 1980s, there is still time to act. The government is therefore following the UK’s example and introducing its own stakeholder pension, the PRSA.
PRSAs will target those who do not have any form of occupational pension scheme with their employment. It will also target those who are self-employed, unemployed, or not in paid work, for example homemakers. The principle advantages of PRSAs are that they will be portable, flexible (contribution amounts can be varied) and eligible for tax relief.
The Hibernian survey discovered that 54 per cent of the working population is not aware of the tax benefits that can be gained by saving into a pension scheme. Furthermore, for the 30-49 year old age group, the tax benefits are even greater under the PRSA scheme than with the traditional occupational pension.
“Without doubt, pensions will be the house-price crisis of the 2020s, the topic of dinner table conversation,” said Ian Veitch, director of marketing and product development at Hibernian.
“We are presently developing a PRSA product, in line with the government’s legislation, which we hope will be available before the end of the year. However, in advance of this, we have produced a PRSA guide to ensure that everyone’s questions are fully answered.“