Pension participation amongst Ireland’s younger workforce is notoriously poor, particularly where employees do not have the option to join an employer scheme.

A recent survey of 1,000 people throughout Ireland, commissioned by regulated renewable energy fund provider Greenroom Investments and conducted by IReach, revealed that people do not realise the importance of pension planning until their mid-thirties onwards.

The Greenroom Investments survey showed that while 66% of people overall (all age groups) feel that one should start a pension in their 20s, this view is less prevalent in the younger respondent; just 46% of young adults (18-34) feel this way compared to 73% of 35-54 year olds.

These results indicate that many people in their 30s saddled with substantial mortgage and childcare payments, regret not starting a pension in their 20s when they had considerably more disposable income.

With up to half of workers in their 20s being offered employer-sponsored pension schemes in public sector or large companies, it appears that the vast majority of the remaining young workers left to their own devices, chose not to start a pension.

“It would make financial sense to begin a pension in your 20s – but the reality is that this simply doesn’t happen”

Commenting on the findings, Michael Bradley, Director of Greenroom Investments, said, “Many people in their 20s have more disposable income than those in later years – they start their first job so they have a salary coming in but often their financial responsibilities and therefore their outgoings are low. So it would make financial sense to begin a pension in your 20s – but the reality is that this simply doesn’t happen.

“There is a definite lack of knowledge and/ or acknowledgement of the absolute importance of pension planning among younger people – many of whom are put off by the complexity of the topic – all of which highlights the need for more education on this topic.

“The Dept. of Social Protection has said for many years that they realise there is a need to simplify Ireland’s pension system – and just last year Minister Joan Burton said she knew that Ireland’s systems have become ‘extremely complex and difficult to understand’ – but it seems that little has been done to address this”.

Michael Bradley, Director of Greenroom Investments is at pains to point out that the key to effective pension planning is starting early.

“The sooner you begin your pension the better – that’s pretty much the crux of it. Those who save into a pension funds in their 20s and 30s have a far better chance of accumulating a much more significant retirement pot than those who leave it until later in life – even if the latter put in more substantial sums”.

Experts at Greenroom Investments suggest the long-term nature of pension planning is the problem.

Michael continued, “Understandably when you’re in your 20s, retirement seems a world away and not something you should concern yourself with just yet. But that is absolutely the wrong approach. We’re in the midst of a pension crisis – it’s a time bomb that’s likely to go off when today’s twentysomethings hit retirement. There simply won’t be enough in the State reserves to provide people with a sufficient State pension.

“For this reason it’s so important that people take a proactive approach and ensure, through their own pension planning, that they won’t be destitute once they hit retirement age”.