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Charlie Weston: Ten things women need to know about pensions

Females will have 38pc less than men to live on at retirement

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Women get a raw deal on pensions. Fewer of them work outside the home, and they often get paid less when they do take up paid employment. Many work only part-time.

All this means that the gender pay gap feeds into the pension issue. So when they get to retire they typically have a third less to live on than men.

A pensions gap of 38pc exists, according to the Irish Human Rights and Equality Commission.

But there are ways women can make the best of a bad situation by ensuring they maximise the value from the State pension, and any supplementary scheme, whether they are in the workforce or not.

Here are 10 things women need to know about pensions.

1 The State Pension

The State contributory pension is regarded as relatively generous. For those who have 48 annual PRSI contributions, the weekly payment is €238.30. This is the payment for people who qualified for pensions before September 2012. You get it from the age of 66. The means-tested State pension non-contributory is a payment for people aged over 66 who do not qualify for a State contributory pension or who qualify for only a reduced contributory pension based on their insurance record.

2 But women often get less than men

Women are losing large amounts of money from their retirement payments due to austerity cuts. A recent report from Age Action estimated that 23,000 females have been hit with lower payments due to changes to State pension eligibility rules in 2012.

Changes made by the previous government make it more difficult to qualify for a full pension. On average, retired workers have lost more than €1,500 a year, with women suffering the biggest hit, according to Age Action.

In 2012, the then-government changed the eligibility criteria for the contributory State pension. It moved to an “averaging rule” to calculate the number of contributions made by a worker.

“Under the old system, if you had an average of 20 contributions a year, you would be entitled to €228.70. But after 2012, this dropped to €198.60, a cut of more than €30 each week,” Age Action’s Justin Moran said.

3 Homemaker scheme worth checking out

The homemaker scheme makes it easier for women who have spent time outside the workforce caring for children to qualify for the contributory State pension. The scheme protects your contributions by disregarding any years spent providing full-time care for a child under 12, or a disabled person over the age of 12.

Read More: ‘I have 20 years of work left … I can afford some risk’

Up to 20 years can be disregarded when the yearly average number of contributions for a contributory pension is being calculated, which can help you qualify for State pension, or a higher rate of pension. Typically, you won’t have to apply for it. If you are already claiming child benefit, carer’s allowance or carer’s benefit, or a respite care grant, you will automatically be entitled to it.

4 Low pension coverage among women

Just a third of women own a pension, according to research. This means that two-thirds of women do not have a supplementary pension. This is despite the fact that women make up almost half of the workforce. Men are much more likely to have a pension. Part of the problem is that women are far less likely to discuss retirement planning with friends.

5 Most women don’t know how to start a pension

A worrying 71pc of women don’t know how to start a pension, according to a survey commissioned by Standard Life. There are two options in the private sector. If you are a PAYE employee your company may have an existing occupational pension scheme. Typically, the employer makes a contribution to this on behalf of the employee.

Large companies often contribute between 5pc and 9pc of annual salary to the pension. If you are earning €50,000 a year this works out at between €2,500 and €5,000 a year. Alternatively, the employer has to offer you access to a pension scheme even if it doesn’t contribute to it. That’s the legal requirement and has been for the past 15 years. Most women are unaware of this extremely important point, according to Aileen Power of Standard Life.

6 the Pension age has gone up

The State pension is now 66, up from 65 previously.

For those retiring from 2021 on it goes to 67.

For those retiring from 2028 the State pension will not be paid until 68.

However, many employers are still sending employees into retirement at the age of 65.

That is why the Citizens’ Assembly called recently for the abolition of the mandatory retirement age.

7 You may have to work until you are 70

People should not get the State pension until they reach the age of 70, a State-supported think tank has recommended. Moving the statutory retirement age to 70 would counteract a fall in the workforce and the rise in the number of pensioners, the Economic and Social Research Institute said recently.

Read More: ‘I wanted to retire by 50 so I could enjoy life. My advice? Start saving’

The chances are that this will be introduced. Currently, there are around six workers for every pensioner. Over the next 30 years this is due to fall to around two workers for every pensioner, adding to the costs of State pensions.

8 Maternity leave should not affect pension rights

If you get maternity benefit, you will get State pensions credits automatically. But this ends after 26 weeks. This means that if you take further unpaid leave, you will need to get your employer to complete the application form for maternity leave credits when you get back to work.

If you are taking parental leave, you should also be entitled to credits. But you have to apply for these.

9 You may get a spouse’s pension

If you are married but do not qualify for a pension, you may be entitled to what is called a “qualified adult” pension. This can be up to €213.50 for those over the age of 66. The payment is means-tested.

However, the concept of women being dependent on their husband in retirement is not appealing for women. If your husband has died and was a member of a defined-benefit pension scheme, you are likely to be entitled to a spouse’s pension, usually half the amount he got in retirement.

10 Pensions adjustment order

A court may make a pension adjustment order in the case of judicial separation, divorce and dissolution proceedings. This designates part of the pension to be paid to a spouse and dependent children.

The judge decides how much of the pension should be designated, according to the Courts Service.

The effect of such an order is that the designated part of the pension remains in the pension scheme but is payable to a spouse and children when the other spouse reaches pension age or dies.

Reference: Irish Independent

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Why an early savings habit will set you up for the future

Pensions are like a marathon says Zurich’s Rose Leonard, if you want to do one you are going to have to start training now. The first mile is the hardest but once you have developed the habit, it gets easier.

The debate around the pension time bomb and the challenges facing the economy when it comes to pensions continues unabated. The biggest challenge is the changing demographics with people living longer. Life expectancy is increasing with men’s life expectancy up from 78 years of age in 2011 to 85 years in 2046. For women that number has jumped too, and females can now expect to live until at least 89 years as opposed to 82 in 2011*. Obviously this is great news, but are we considering the impact on the cost of supporting the retired population, and will the State pension sustain those in retirement for a longer period of time?

With increased life expectancy combined with forecasted birth rates expected to produce a doubling of the proportion of retired people to workers by 2050, a renewed focus on encouraging long-term savings is what is urgently required.

“Today there are about five people working for every one person retired. In less than 40 years’ time we will probably have about two people working for every one person retired,” Rose Leonard, head of distribution and customer relationship management at Zurich says.


Rose Leonard, head of distribution and customer relationship management at Zurich


Rose Leonard, head of distribution and customer relationship management at Zurich

This changing demographic will place a considerable financial burden on the State and tax payer. “Because people are living a lot longer they are going to need a lot more financial support in retirement, but they haven’t started to save earlier and we have to address that problem now,” she warns.
One of the main ways this problem can be addressed according to Leonard is for people to accept responsibility themselves and start saving earlier. “My advice to employees would be to join their pension scheme as early as possible. If an employer doesn’t provide a pension scheme, it would be worth considering starting a personal pension. People need to develop a habit of long-term savings really from their mid-20s.”

Communication & engagement

Leonard agrees that engaging people in the conversation around pensions can be another challenge. “It is true that a lot of people haven’t engaged in the conversation at all”, she says “and part of that might be because it’s a bit complicated.” According to Leonard, those that haven’t engaged tend to be younger, and people starting to show an interest in pensions when they reach the age of 50 is too late. “If you retire at 65 you could live for another 30 years so you need to be able to provide a replacement income for those 30 years in retirement. Starting to save long-term in your 20s is the best approach.”

For the millennial generation – who live very much in the here and now – why should they be planning now for their retirement many decades from now? “People in their 20s need to put time aside to understand the cost of pensions long-term and they need to develop a habit of long-term saving. It’s like running a marathon – you might say you would like to run a marathon in 2018, and if you do, you need to start training now,” Leonard explains.

Admittedly, most people don’t want to think about getting old and for the majority of people retirement is far from their minds. But the reality is that most people do grow old and live well into their old age and have a good long retirement. So encouraging people to think about how they can enjoy their life in retirement is key.

Leonard agrees that central to engagement is how pension providers break down the barrier and demystify the process. “In Zurich, we pride ourselves on communication. Our mantra when it comes to pension schemes is ‘communicate, communicate, communicate’. It’s important for companies like Zurich to keep our message clear and simple and I feel that’s something that we are very strong at.”

A universal system

There has been much discussion in Ireland around the introduction of auto enrolment, whereby a universal, workplace retirement saving system for workers without supplementary retirement provision, would be in place. Essentially, an automatic pension scheme would make it compulsory for employers to automatically enrol their eligible workers into a pension scheme.

“When we talk about auto enrolment the question is should we have a universal retirement scheme in Ireland whereby employers would automatically enrol their employees into this scheme,” Leonard asks? “The consensus among the government, the industry, and other bodies is that there should be a universal retirement scheme whereby members would be automatically enrolled.”

Leonard argues that those people in their 20s and 30s that don’t want to think about retirement would benefit from automatic enrolment, and it would encourage them to develop a habit of saving for the future. “We spoke earlier about whether or not the State pension will be sustainable, and when you consider that there are 17,000 new pensioners year-on-year, then it probably isn’t sustainable; something has to be done – we all have to accept responsibility for saving in the long-term.” A final piece of advice from Leonard for those thinking of starting a pension: “Start today,” she declares.


In order to help provide for your retirement, starting a pension is one of the smartest financial decisions you can make. When choosing a pension, having all the information you need is key. Sound advice is invaluable, so it’s a good idea to seek advice from a financial advisor. Talk to your company’s scheme advisor or an independent financial advisor who will guide you through the process and help you select the right pension plan for your circumstances. You can find a local financial advisor near you with the Zurich Advisor Finder. Alternatively, Zurich’s Financial Planning Team can provide you with more information about Zurich’s pension plans and options. For more information visit www.zurichlife.ie.

Reference: The Irish Times

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Planning to retire in style? Managing your income in retirement is key

As people live longer it’s more important than ever to take an active part in planning our retirement funds, says Pòl Ó Briain of Zurich

‘Getting financial advice is not the preserve of the wealthy’. Photograph: iStock

In our parents’ generation, retirees lucky enough to have a pension had little option but to use it to buy an annuity. This provided them with a guaranteed income for life. About the only decision to be made on retirement was what brand of watch to look for!
The advent of Approved Retirement Funds (ARFs) changed all that. A more flexible retirement option, they allow the retiree to remain invested during retirement, drawing down an income as and when they need it. The flipside, however, is that ARFs require ongoing financial decision-making throughout retirement.

“Annuities were very popular in the past, and indeed for some people they remain the preferred option,” says Pòl Ó Briain, head of retail products with life and pensions company Zurich.

Pòl Ó Briain, head of retail products with life and pensions company Zurich

Pòl Ó Briain, head of retail products with life and pensions company Zurich
However, the annuity rate – which, together with the amount of money you have accumulated in your pension fund, determines the fixed payment you receive each month in retirement – is set according to the prevailing interest rates. These have remained at historic lows for nearly a decade.

“As a result, annuities are increasingly perceived as not offering good value, particularly if you want to provide a pension for your spouse in the event of your death. You can quickly find that what looks like a very healthy pension fund at retirement may not provide you with as much annual income as you might have expected,” says Ó Briain.

On top of that, once an annuity is purchased there’s no transferring an annuity to your estate. “Plus, with an annuity, once you set it up, that’s it, there’s no going back,” he says.

With an ARF any money left in the fund after your death passes to your estate. On the downside you stand to lose out if the value of your investment falls.

Given that retirees typically see their income-generating capacity reduced, ARFs require a more active approach to managing investments.

And while an annuity may provide a lower income at outset than an ARF, it does at least have the advantage of providing that guaranteed income for life. With an ARF there is the risk of exhausting the pot of money due to poor management of withdrawals or poor investment performance.

As people live longer, they are going to need to take more action to ensure their funds last throughout their retirement. “You need to ensure you are investing your ARF in an appropriate way, taking into consideration your overall risk tolerance,” says Ó Briain.

It’s important to have regular reviews with a financial broker or advisor, to ensure you are managing your retirement funds in the most effective way

When annuities were the norm, the bulk of pension decisions were made as people approached the final years of their career. Traditionally, retirement savers would move from higher risk investments to lower risk options, de-risking in the years approaching retirement. It was seen as important to shield savings from market volatility before the purchase of an annuity.

Now however, if you decide an ARF is the better option for you, that de-risking strategy may need to change, to reflect the fact that you are going to remain invested post-retirement, possibly for decades.

Post retirement, ongoing decisions will be required. “It’s important to have regular reviews with a financial broker or advisor, to ensure you are managing your retirement funds in the most effective way,” he says.

Getting financial advice is not the preserve of the wealthy, nor are ARFs themselves, he points out. “There is still a misconception that ARFs were introduced for people with a lot of money, but that is not the case,” he says.

As people live longer in retirement generally, it’s more important than ever that they take an active approach to their retirement funds. “For example, if you have an ARF investment fund of €100,000 and you plan on taking €10,000 a year to live on, which might seem reasonable, it’s not going to last 20 years,” he says.

“You therefore have to figure out the best way to manage your money, being conscious both of your tolerance for risk and your capacity for loss, which is why having an advisor to assist you will become so important in retirement. After all, while you are still working in an organisation, you are likely to have all sorts of workplace supports to help as you approach retirement. When you are in retirement, you no longer have that support.”

Changes to an individual’s health and personal circumstances as they age will also require regular review. In some cases those who eschewed an annuity when they first retired may want to consider one at a later stage – especially as annuity rates increase with age. If so, the option of converting some or all of an ARF to an annuity may be worth exploring.

Managing ARFs throughout retirement is increasingly likely to be the norm.  As ever when it comes to retirement, the best advice is to take advice. “It is most certainly not something that should be done without proper guidance,” says Ó Briain.

Reference: The Irish Times

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Generation Rent: The importance of being earnest

Couple looking at a house

Generation Rent: The importance of being earnest


According to Savills 18% of people in Ireland now live in private rental accommodation, which is 497,111 households. With no real history of long-term letting or leases and the introduction of Rent Pressure Zones to try to slow down rent increases, the growing concern is how renters can protect themselves in this progressively volatile market.

A report from Goodbody Stockbrokers in May showed that the average price of a house is set to soar, escalating by 10% this year and by another 8pc by the end of 2018. In turn, more people are renting accommodation, with an earnest focus on saving to get onto the property ladder.

The rise of generation rent is evident but it is a culture that before now was not commonplace in Ireland. Traditionally, third level students aged 18-25 years and single people aged 20-35 years was the profile of renters. This profile has extended to include individuals and young families in their 30s, 40s and 50s. Other mainland European countries, such as Germany, have had a longer history with long-term renting, where accommodation leases are available for up to 10 years and subletting apartments to hold onto a lease is the norm. The introduction of longer rental leases here could be a solution by offering more security to renters and landlords, both benefitting from the longer-term arrangement.

According to daft.ie, our rented sector can be split into categories: ‘movers’ and ‘stayers’. One of the main reason people choose not to move regularly is if rents are rising rapidly in the market and there is a lack of availability, even if the accommodation they are in is not 100% suited to their needs. The former Minister for Housing Simon Coveney brought in Rent Pressure Zones (RPZs) in reaction to the increasing market rents, which came into effect in December 2016. This means that rent increases in these areas can be capped at 4% annually, and is seen as another reason why the amount of stayers has risen significantly.

Stated in the Daft.ie rent price report for Q1 of 2017: “Since 2013, market rents nationally have risen by just over 50%. However, sitting rents have increased by just 27%. In other words, those who have stayed in the same lease have enjoyed a discount relative to market rents, with rents increasing by just half the increase seen on the market.”

Sitting tenants now enjoy not only a discount relative to the market rent, but also protection of that lower rent into the future. Meanwhile, movers in the private rented sector face not only far higher rents but almost no availability in the market.”

Rent Pressure Zones

At a recent off-site strategy meeting with the now Minister for Housing Eamonn Murphy, it was suggested that a new city be formed in the midlands to help with the “choke” on Dublin. However, while the capital remains the most expensive place to rent, prices across the country have also seen increases but with varying degrees. Figures from Daft.ie, show that in Dublin, rents are now an average of 15.4% above their previous peak while in Cork and Galway cities, rents are 9.7% and 17.8% above levels recorded nine years ago. Outside the cities, the average rent is 3% above its previous peak.

In the three of the counties closest to Dublin – Meath, Kildare and Louth – rents have increased by more than 60% since 2012, which is to be expected considering a lot of people have turned to commuting from further distances in order to be able to find accommodation and affordable rent.

All three cities in Munster saw their rents increase by at least 10% in the year, as did Waterford, Cork and Clare counties. However, fewer than 800 homes were available to rent in Munster on May 1st, a decrease of almost 100 on the same date a year earlier. In fact, Ronan Lyons from Daft.ie reported that there were “fewer than 3,100 properties available to rent nationwide on May 1st compared to 4,000 three months previously.”

Getting protection

With a concerning fluctuation in the number of houses available, for sale or let, the importance of protection for generation rent is crucially important. The rental market is an added pressure in itself for renters, leaving them vulnerable in many ways. But how would they cope if, for example, they became ill and couldn’t pay the rent?

Renters like mortgage holders need similar protection and a life insurance policy could be used to offer that much-needed security. Zurich Life offers serious illness cover that enables you to gain assistance at a time when you need it most. If you have to stop work due to a serious illness diagnosis, this cover provides you with financial support that could cover your rent during your treatment.

Regardless of your living arrangements, a life insurance plan can be used to protect you and your family from financial strain should you become ill and are unable to provide for them. There is no reason why as renters, you can’t have similar financial protection to mortgage holders. To find out more about the right protection plan for you visit Zurich Life or speak to a financial broker.

Reference: ZurichLife

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‘When it comes to women and pensions, things are not improving’

The current pay gap in Ireland between men and women is estimated at 14.1 per cent. The gap between the value of men’s and women’s pensions is more than two and a half times that, at 37 per cent*.

At its Celtic Tiger highest, pension coverage for women was 51 per cent. That has since fallen to 46 per cent, while 55 per cent of men have pensions. To put it more starkly, the Central Statistics Office (CSO) indicates that women are 80 per cent more likely to be impoverished at age 65 than men. Women aged 75 to 79 are three times more likely to be so.

“When it comes to women and pensions, things are not improving. If anything, they are getting worse,” says Kristen Foran, national sales director of Zurich Life Assurance.

Traditionally there have been a variety of reasons why women’s pensions – both in terms of coverage and value – lag men’s. This includes women’s greater presence in the home, doing unpaid work there that leaves them reliant, perhaps, on their husband’s pension.

Some women experience gaps in their employment history when they have children. Such time out leads to gaps not just in private pensions, but in State pension entitlements too. Only 16 per cent of people entitled to the State contributory pension are women, points out Foran. Homemakers are not entitled to any kind of ‘pension credit’.

Even where women do have a pension, its performance over time typically lags that of men. Here research indicates that women are typically more risk averse in terms of how much they contribute to their pensions fund, and how they wish it to be managed.**

Women’s retirement prospects vary by sector too. Of women aged between 45 and 54 in the education sector, one in four (25 per cent) have no pension. In the health sector that rises to almost one in three (32 per cent). Surprisingly, women working in the financial and business sector, who might be expected to know more about financial security, fare even worse, with 39 per cent of women in this age group having no pension*.

That climbs to 62 per cent for women working in retail and wholesale. In the hospitality sector – a major employer – less than one woman in five of this age group have a pension.

What should really set alarm bells ringing for women is not the fact that things are this bad, but that, “if anything, they are getting worse,” says Foran.

Part of her job as national sales director at Zurich is to try and figure out why this might be. In truth, she only has to talk to her girlfriends to find out. “Part of it is that women don’t want to think about pensions because they typically don’t want to think about getting older. More than that though is the fact that they tend to have priorities other than themselves, typically children and family,” says Foran.

Any time she mentions the importance of pensions to her peers, she’s met with the same stock replies: “They’ll all say, ‘Sure who can afford it?’ And that all their money is going into their kids, so it goes on the long finger.”

“It’s important for women to start having that conversation about what kind of retirement they envisage. Women are living longer than men, so our needs are greater.”

Marketing professionals know of the truth in the old adage that men buy for themselves and women buy for everybody else. This too may be part of the problem. “We don’t prioritise ourselves, and now we are the squeezed generation – women with both kids and eldercare commitments,” says Foran.

But there is another issue with the pensions industry that she also believes is preventing women from ensuring they have independence – in the form of financial security – in retirement.

Pensions are sold, not bought, she points out. “No one comes banging on the door looking to buy a pension. The value of it has to be explained, which means they have to be sold. Does the industry need to look at communicating better to women and developing pension plans designed to suit their needs? It would certainly help to increase engagement from women,” Foran says.

Consequently, one of the most effective ways to bridge the pension gender gap would be if more advisors were women. “The fact is, where women do advise on pensions, they are really good at it because they are strong on the empathy side and they understand women’s needs and concerns,” she says. “If we had more female advisors in the industry it would go a long way towards helping women’s status in relation to pensions.”

In the meantime, social media might help. “Women are the social junkies of the world and if you look at the top 100 digital influencers in Ireland, the majority are women. We can see social media as a really powerful way of getting this message out to women,” in a communications style that suits them, and that comes via a referral network they trust.

In many ways, for women of a certain age in Ireland, talk of pensions is almost as taboo as talk of menopause, she admits. “Yet if you think about it, on US TV shows like Friends you hear people talking about their 401K retirement plans all the time. It’s a much more prevalent topic of conversation there. Here women don’t want to talk about it. But it’s important for women to start having that conversation about what kind of retirement they envisage. Women are living longer than men, so our needs are greater.”

The first step towards figuring out what those needs are is for women to visualise the kind of retirement they want. By her own estimate, Foran reckons she’d need the State pension and a minimum pension fund of €20,000 a year to be able to enjoy retirement.

“Wouldn’t it be nice to feel financially secure and live the life you’ve always dreamt of in retirement,” Foran asks? “Planning your pension now is the first and most important step to fulfilling this dream.”

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Retirement Age Update

While contractual compulsory retirements are still permitted in Ireland, since January 2016 all retirement ages must under the Equality Acts be capable of being justified on a legitimate and objective basis.

In effect, this puts the onus on the employer to show that the retirement age chosen for that workplace is fair and reasonable. Otherwise, such compulsory retirements will be considered to be age discriminatory.

Proposed changes

In recent years, a number of private members’ bills have sought to lift the grey ceiling by tabling the issue of abandoning the concept of compulsory retirement in Ireland.

The Equality (Amendments Act No 2) Bill 2012 proposed prohibiting a compulsory retirement age of 65 with limited derogations.

A second similar bill two years later, the Equality (Abolition of Mandatory Retirement Age) Act 2014, proposed by Labour TD Anne Ferris, sought to abolish compulsory retirement ages where the employee is willing to continue to remain in employment.

As regards the Equality (Abolition of Mandatory Retirement Age) Bill 2014, the then minister Aodhán Ó Ríordáin advised in his speech on October 9, 2015, that the government did not intend to oppose this bill. He noted, however, that there were serious policy concerns which needed to be considered.

He suggested that the question arose as to whether this bill was strictly necessary as the Equality (Miscellaneous Provisions) Act 2015 already brought the law into line with the European position (but did not go as far as to remove a compulsory retirement age).

He noted in his speech that the proposed bill would involve setting aside the retirement provisions of most existing employment contracts on a unilateral basis and would have “serious implications for public sector employment, for pensions policy and for labour market policy generally”.

He noted that, as such, it would be a radical step and careful consideration needed to be given to the objective and whether there were other approaches that could avoid any legal pitfalls. This bill ultimately stalled.

A further bill is being proposed by Sinn Féin TD John Brady as the Equality (Abolition of Mandatory Retirement Age) Bill 2016 and this bill is working its way through the Dáil, but concerns have been raised as to aspects of the bill.

It is clear there is cross- party political support to abolish compulsory retirement, but concerns remain as to policy and costs. Notwithstanding, it seems inevitable that this change will become law following a global trend.

Contractual agreement

In the meantime, employers should ensure that any specified retirement age is clearly set out in the contract of employment and a clear retirement age policy is in place which justifies the organisation’s retirement age.

Retirement is the right of an employer to lawfully dismiss an employee upon reaching a certain age. It has traditionally been used as a means of lawfully managing the exit of older workers from the workforce, and generally seen as a means of allowing workers to exit employment with dignity and to avoid being dismissed on the basis of capacity or for poor performance. However, times are changing.

Longer working life

The traditional retirement age of 65 has been in place since the end of the 19th century and, since then, the average life expectancy has risen significantly.

World Health Organisation statistics show that global life expectancy increased by five years between 2000 and 2015.

This trend, combined with decimated pension pots, means more workers are ready and willing to stay in the workforce for longer.

This issue is likely to become more contentious in the coming years in light of the state pension age changes.

In 2014, the age of entitlement to the state pension was raised to 66 and further changes are coming down the tracks – 67 in 2021 and 68 in 2028. It is anticipated that more employees will look to bridge the income gap by remaining in the workforce.

Anne Lyne, Sunday Business Post, 11th June 2017

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Financial advice for females – Some tops tips for improving your planning

While money management entails the same approach whether you are a woman or a man, women’s financial needs are largely different to men’s. Women still generally earn less than men, even in the same roles; they are more likely to take breaks from the workforce and, on average, live longer.

Being financially savvy means providing for both the planned events in life such as study, travel, buying a house and, of course, retirement, but also the unexpected events in life such as the diagnosis of serious illness, reduced circumstances or the premature death of you or your spouse.

Here are some ideas on how women can get on top of your financial planning.

Plan for retirement now
Take out a pension now, if not yesterday – contributions to Revenue-approved pension schemes attract very generous tax relief (up to 51 per cent for company directors).

The contributory state pension is currently at around €12,000 a year, if you’re even entitled to it. This represents a major income drop for the majority of people, and the age at which you become entitled to the state pension is being pushed out further, so the bigger your private pension pot the better.

Review your existing pension arrangements to ensure that you know this pot is working for you, and that the fund will realise your retirement objectives in terms of paying you your expected annual income from your chosen retirement age.

A recent HerMoney survey revealed that 45 per cent of female respondents claimed to have pension policies in place from previous employment contracts, but 52 per cent of those respondents had never reviewed these policies, and had no idea about how they were performing or how much they were worth.

The average maturing pension pot in Ireland is approximately €100,000, but the minimum pot required at normal retirement age is actually closer to €400,000. This pot would provide an additional private retirement income of approximately €12,000 per annum at age 65.

Pension funding is the most tax-efficient way of building wealth, and pension schemes attract a whole package of generous tax benefits at the beginning, middle and end of the process. Over 50 per cent of Irish women surveyed by HerMoney survey were totally unaware of these facts.

Protect your earnings
A staggeringly low number of women have income protection policies, despite the fact that many of them are significant contributors to the household income. This means that the risk to the overall family finances, in the event of them being diagnosed with a serious illness or being hit with an unexpected injury, is considerable.

Life cover is also a fundamental part of having a sound financial plan, and few people are aware of that fact that it is quite cheap, which means there’s no excuse not to get covered now. The purpose of life cover is to provide you with the comfort of knowing that a lump sum of money will be available to protect your loved ones in the event of your passing. It is especially important in the case of parents with young children.

It is essential to have cover in place to cover any outstanding debts, like the mortgage, credit cards and car loans, and other expenses including funeral and burial costs. Talk to an adviser to discuss your best options in this regard.

Start saving
Everyone should start with a savings goal. The main thing is to be realistic here – think of a specific purchase or benchmark you could realistically reach in 12 months (eg, that dream holiday, a new car or maybe just a rainy-day fund). Either way, your goal should require self-discipline and a little sacrifice when it comes to spending.

In order not to lose track of this goal, a good idea might be to get a family member to hold you accountable, or write the goal down in a place where you’ll see it every day, like a post-it on the fridge or in your diary.

Knowing the difference between a ‘want’ and a ‘need’ can greatly save you money. Many of the items we buy are items that we don’t have to have in order to survive, so avoid over-extending yourself and think before you act
Ideally, everyone should have four times their net monthly salary in an account where it can be accessed immediately for unexpected events.

Having a steady amount taken directly from earnings is the least stressful method of saving. It doesn’t have to be a large sum, but needs to be regular, realistic and in line with personal overheads.

Women are traditionally better at saving, but negative interest rates impact the value and return on standard savings with banks, so talk to a financial adviser about investment products that will make your regular savings work harder.

Invest in the markets
Financial markets deliver better returns than bank deposits over time, especially with current low or no-interest deposit accounts. If you have a nest egg or inheritance, make your money work harder for you and enjoy better returns.

Talk to an adviser and choose a plan that you can invest in on regular basis and which you can tailor to your changing life goals and investment needs. Once your attitude to risk has been assessed by your adviser, they will explain the different types of investment funds available to suit your requirements.

Assess overheads annually
The cost of household overheads, from school fees to insurances, is constantly rising. Make a point of assessing your outgoings against your income once a year and do not assume it will be a static picture.

Make a note in your diary of when your main insurance policies are up for renewal.

Then, about one month beforehand, start shopping around – most people leave it too late and end up committing to perhaps an overpriced policy for yet another year.

Shop around for the best deals in utilities: it is possible to save considerably by switching providers of telecoms or other utilities by simply asking for a better deal.

After you have reviewed the big ticket expenses, examine where exactly the rest of your pay is going and which areas you’re overspending on. Eliminate any unnecessary items of expenditure.

As a result, you’ll feel more in control of your money, and this is a key step in achieving that path to financial freedom.

Get independent financial advice
Unlike the financial spring clean which we can take care of ourselves, many people don’t have the expertise to assess the bigger costs like mortgages.

Checking that you are still getting the best rate or whether making a lump-sum payment from a no-interest deposit account will save you more in the long run are all areas that need the expertise of a professional mortgage adviser.

There is generally a decent return on the small fee invested in proper financial expertise.

If you are a mortgage holder who took out your loan in 2011 when variable rates were at their highest at 4.4 per cent, you might now qualify for a rate as low as 3.1 per cent if your loan to value is less than 50 per cent.

This could mean huge savings over the total mortgage term. A review of your associated mortgage life cover should also be factored in here.

Manage your own money
Some women make the big mistake of leaving control of their finances to the men in their lives.

If they then end up single later in life due to separation, divorce or death, they are not in a good position to take back control of their finances.

Women should manage their own money at every stage of their life. They should have at least one bank account in their own name in order to build their own credit history. They should know the details of their family’s finances, investments and debts.

Knowing all of these details can greatly help you to come out of a possible negative situation, and reduce the financial strain that could easily have been avoided.

Adopt a foolproof credit card strategy
Make this the year that you finally tackle that nasty credit card debt once and for all. This is an area completely within your control. Every time you pay off a card with a 16 per cent interest rate, you get a 16 per cent return on your money, which in the current climate of low deposit rates is a no-brainer.

Check to see if you qualify for a balance transfer to a card that offers a low or zero per cent introductory interest rate for the first six to 12 months. If you do manage to get a good deal, move your high-rate debt to that new card. Try not to use the card for any new expenses and if you do, push yourself hard to pay off the balance as soon as possible.

Think before you buy
Much easier said than done, but try your best to make wise buying decisions. Consumers’ spending decisions are processed more by emotions than by the numbers.

Knowing the difference between a “want” and a “need” can greatly save you money. Many of the items we buy are items that we don’t have to have in order to survive, so avoid over-extending yourself and think before you act.

Know your tax credits
Everyone should be aware of all the tax credits and allowances that apply to them.

Too much money is being left in the hands of the Revenue in the form of unclaimed taxes.

Women returning from maternity leave should review their tax credits to ensure that they are correct, as their tax credits should increase to reflect the fact that they are no longer in receipt of maternity benefit.

For further information on all tax credits and allowances available, see revenue.ie.

Carol Brick, Sunday Business Post, 4th May 2017



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Retirement Seminars 2017

IPF organised four seminar around the country in 2016.  All events were fully booked with 515 attendees in total to these seminars.

Due to this demand, we have two upcoming seminars this Spring.

The first on March 3rd in the Kingsley Hotel in Cork, followed by 22nd March in the Westbury Hotel Dublin.

These events prove to massively popular and are always oversubscribed.

Those interested in attending should book their places as soon as possible through sarah.connolly@ipf.ie.


Here is the usual agenda for the seminar:

1) Safety in the Home An Garda Siochana
2) How to take care of your health after 60 Doctor
3) Financial Planning for Retirement Financial Advisor
4) Making your money work for you in retirement Investment Specialist
5) A Positive Approach to Retirement Retirement & Life Planning Specialist
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Retirement Seminar – Westbury Hotel – 21/09/2016

Another successful Retirement Seminar in the Westbury Hotel this evening.

Thanks to all the speakers who gave their time and to all who attended. Well done to Margaret Dunne who won the hotel voucher at the end of the evening.

We will be announcing dates for our 2017 Retirement Seminars early in the new year. Keep an eye on our Events page for further updates.


seminar-4 seminar-2