Pensions in Ireland is paid to people from the age of 66 who have enough social insurance contributions. People who qualify for a state pension are also allowed to have other incomes and still receive the State pension. The State pension is taxable, but if the pension is the only source of income it is not likely to be taxed.
In order to qualify for the State pension an individual must have started paying social insurance before the age of 56 and have paid at least 520 full rate social insurance contributions. An individual must also have at least 48 paid or credited full rate contributions from the year they started insurable employment until reaching 66 years of age.
Recent research has shown that only 32% of people would like to continuing to work after the age of 66. This is concerning due to the increasing financial pressure leading to delay in retirement. Another recent statistic gathered from 1,000 employers revealed that only 61% of employees believe that they will have no choice but to work past the age of 66. This figure opposes the less than a third of individuals or the 32% of employees who have a desire to work after turning 66. These opposing figures reveal great dissatisfaction in the State’s pension plans.
Current Government policy has defined that workers will not be able to claim a €13,000 a year state pension until the reaching 67 years old starting in 2021. The minimum age required to receive a pension is expected to increase to 68 years old by 2028. Statistics have determined that most people are happy to retire at the age of 65 while a minority want to keep working.
The CEO of Alone, Seán Moynihan, described how “the problem is the necessity of having to work”. He continued to state that people are now working longer and thus paying taxes for longer. The Government’s decision was an instrument to look at how pension spending is controlled. However, changing age requirements heavily effects the stress and health concerns of the elderly population.
Moynihan also described the implications of high cost of living and housing on the retirement age. The trends in the housing market are forcing more people to continue to work into older ages. He revealed that many older people have the desire to keep working but “fall victim to mandatory requirement clauses”.
Starting a pension is essential to planning for retirement. As the trend in increasing the age requirement for receiving a pension continues, it is essential to develop a pension plan early on in an individuals career in order to ensure future financial stability.