Kilkenny 'Pension Gap' increases

Kilkenny 'Pension Gap' increases

The pensionn gap in Kilkenny has grown by 38% in the last five years - that's accorindg to Aviva's Mind the Gap analysis of people with private pension.

That's a shortfall of over €500m plus iof local ‘people want to supplement their retirement with a private pension.

And the percentage increase mirrors the national trend - but compares badly with the overall 6% in the euro zone.

Aviva’s second instalment of its landmark Mind the Gap analysis of the pension savings gap across Europe demonstrated that the position in Ireland has become even more severe in the last six years, with Irish people now needing to save an additional €27.8bn a year to close the gap between current pension savings and the income needed to provide an adequate standard of living in retirement. In 2010, the gap in Ireland was €20.2bn.

The size of the gap means the current generation of retirees - those due to retire between 2017 and 2057 - will have to save, on average, an additional €12,200 (gross) per annum or €1,017 (gross) per month. This takes account of the State Pension but excludes tax relief on pension savings. This is the second largest savings gap per head of population in the 8 EU countries included in the Report: the UK’s gap is the highest at €13,200 and Germany’s, at €11,600, ranks in third place.

Gary Marshall, Managing Director of Aviva Ireland Life & Pensions, said: “Despite the pressure on the public finances throughout the crisis, the government, to its credit, maintained the tax relief on pension saving. Nonetheless, pension coverage has fallen by 4.5% over the last 6 years. Our report shows that the introduction of auto-enrolment has been an important factor in the bridging the gap in the UK. We believe a similar system would have the same beneficial impact in Ireland but it needs to be introduced without any further delay.”

He added that the pensions’ industry needed to work harder on building confidence in pensions: “Our bread and butter as an industry is encouraging people to save for retirement and we need to rebuild their trust in pensions by offering simpler products that are transparently priced and that suit their needs. That is why Aviva has taken the recent step of abolishing all administrative fees and ancillary charges from its new range of pension products and why we will review the rest of our portfolio to assess whether it is possible to extend this measure. Our good fortune in living longer and more active lifestyles should not become a burden to us. I believe if all stakeholders work together, we can ensure a secure retirement for all.”