The new report 'Bringing Retirement into Focus: 2021’, by retirement experts, Standard Life, highlights how the retirement landscape in Ireland has altered.
A new report from life and pension specialists Standard Life reveals some interesting insights into people’s attitudes towards retirement.
Perhaps the most interesting point is that the majority of us wish to continue working past retirement.
Meanwhile the gender gap between men and women in terms of pension cover and knowledge remains worryingly high.
The report ‘Bringing Retirement into Focus: 2021’ looked at the attitudes of 1,150 adults, across five generations, and explored people’s attitudes, expectations and experiences with regards to retirement and identifies how they differ by generation, gender and financial security.
The results in detail
The traditional view of retirement is changing, according to the report, with just over half (52%) of adults saying they would like to continue working beyond their retirement date.
Moreover, many expect that this will be out of choice rather than due to financial circumstances. In fact, the findings highlight that those with evidence of financial security (earning >€30k and who have a pension) are more likely to want to continue working into retirement than those without.
This illustrates an increasing reluctance amongst adults to view retirement as a sudden end to their working life. Instead, people are more likely to see it as a time for a change of pace.
Among those closest to retirement (55–64-year-olds) the report reveals that the top reasons for wanting to continue working are:
- fear of boredom (60%)
- enjoying the mental challenge (55%)
- enjoying the social interaction (53%)
- fear of ageing faster (47%)
The age at which we intend to retire continues to be deferred as we grow older. The average expected age for those aged 55-65 to retire is 65.8 years versus an average of 63.6 years for those aged 25-34.
However this is probably a tad optimistic for this latter group as 58% of millennials (21-39) say they don’t even own a pension.
The report also reveals that 19% of adults have returned to work after formally retiring, with a quarter of those being 65 and older.
Reasons for returning to work include:
- Keeping mentally active (32%) - rising to 47% for those with a pension
- Financial reasons (28%),
- To pursue a passion (10%)
- To fill the time (10%)
- For social interaction (9%)
The research also found that amongst retirees, over a quarter (26%) felt like they had no other choice but to retire when their employment contract came to an end and less than a quarter (24%) retired because they did not want to work anymore.
Preparedness for retirement and the positive impacts of planning
Standard Life’s new research also reveals that less than a third (31%) of people feel prepared for retirement with just 29% saying they feel financially prepared, however 48% say they feel socially prepared and 54% are mentally prepared.
Unsurprisingly those with a pension are more likely to feel financially prepared than those without (52% v 19%). The research reveals they are also more likely to look forward to their retirement (56% v 33%), feel confident that they will retire (47% v 33%) and see retirement as an opportunity to fulfil their potential (40% v 27%).
When it comes to what retirees regret about their retirement plans, just under a quarter (23%) said the difficulties of maintaining a social life in retirement was something they regretted not planning for and 15% wish they had given more thought to how much of a change it would be.
The gender gap
Despite female pension ownership showing positive momentum, it still tracks behind men overall (45% versus 55%). When analysed by pension type (public, occupational and personal) women are far more likely to own a public pension and less likely than the national average to own an occupational or work pension.
However, it’s women’s propensity to engage with their pension where the chasm of pension parity is most blatant. Women say they’re far less likely to take an active interest in their pension than men and so they’re far more likely than men to say they don’t know how their pension is performing (30% versus 11% of men).
Women are also more likely to display ambivalence towards, or suggest a lack of understanding of the tax relief available on contributions. 27% of female pension owners neither agree nor disagree that they’re taking advantage of the tax relief available in comparison to just 18% of males.
Time to engage on pensions
Commenting on the report, Alan McCarthy, Head of Distribution at Standard Life said:
At Standard Life, we’ve realised for quite some time that the way in which our customers are planning for and experiencing retirement is changing. Our Bringing Retirement into Focus: 2021 report shines a spotlight on the spectrum of attitudes, expectations and experiences shaping modern retirement in Ireland today. While some view it as a time to stop work and put their feet up, many more view it as the time when the pace to working life changes rather than it coming to an abrupt end. More than half of the public want to continue to work in some capacity even if financially comfortable. This shows that while financial security is important, it’s not the only ingredient for an enriched retirement. Having a purpose, keeping an active mind, keeping connected to one another are other important factors and needs that have become even more poignant after the events of the past year.
Whatever their plans, it is clear from the research that those who engage with a pension and plan ahead are more likely to feel confident and look forward to their retirement.
Get more info
If you’ve yet to start saving into a pension you might not know where to start.
So check out our beginners' guide to pensions where we give you the lowdown on all the basics you need to be aware of.
And with household deposits now at a record high of €135 billion - a pension is a great place to put some of your excess cash. We discuss this option and others in our article on savings options here.