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Retirement is no longer guaranteed for the younger generation in Ireland. The State pension is unsustainable at current levels and represents a very expensive problem. What was once a guaranteed source of income in retirement, now looks more and more like a State sponsored Ponzi scheme.
The government is failing to educate the general population on the importance of private pensions and they’re failing to introduce policies to help solve the crisis. The responsibility is on us, the Irish people, to take accountability for our retirement planning and do everything we can to maximize our chances of financial freedom in retirement.
0:00 Introduction
1:55 State Pension Recap
5:12 The News This Week
7:39 The Solution
13:02 Conclusion
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How are you feeling about retirement in Ireland? Let me know
Totally agree with your points made on improving the rules around PRSAs. That PRSA landscape is currently quite opaque and not easy to navigate. And there are plenty of employees that work for employers that do not have company pension schemes and are therefore forced to use PRSAs. So this is not only an issue for self-employed people.
The GDP of Ireland is 417 billion euros per year so funding 15 billion shortfall isn’t really a problem. It’s in the interest of financial advisors to scare people into thinking state pensions will collapse. Then they get rich from really poorly performing private pensions. The track record of private pensions is shocking…4% average growth on pots of hundreds of thousands of euros. Criminal
100% agree with this video. The biggest future crisis isn't just with pensions but what of the age group 30-40 who don't already own a home and with a family. If prices of property continue to rise couoled with insane rents these people will not be able to get on the property ladder and will effectively "age out" of qualifying for a 30/35 year mortgage to pay off before retirement. That will in turn result in lifetime renters who in 40 years time will retire and still be forced to pay rent for their home but will be unable to do this with the state pension alone, which unfortunately is the only support they will have because costs of living prices at the moment and inflation are so high that they simply cannot afford to make any personal contributions towards their pension.
This coupled with all the points you mentioned in the video will lead to a huge crisis in Ireland and probably other countries circa 2055
Keith woods runs Ireland politically is he super rich in Ireland yes. He top sinn fein politically Thomas he fed up with them. Martin sellner won watch no it Patrick lenart Austrian FPO both them need Keith woods he Tory party in Britain. Keith Woods runs Ireland politically to win Power and win get FPO Austrian government in Vienna Austria Thomas politically.
Good on you. You called it out for what it is. “A State sponsored Ponzi scheme”.
Don't you feel it's a little contradictory to ask in the same video for personal accountability and mandatory enrollment in a pension scheme?
If they created a sovereign wealth fund for pensions instead of operating a Ponzi then this issue wouldn't exist.
The problem as I see it is that there is a two tier system as regards pensions in Ireland. We have the public sector pensions for all those who work in the public sector which is a defined benefits pension scheme whereby the state employee is given a contract which guarantees an amount is paid to the state employee upon retirement along with a bonus which is tax free.
The private sector employee is stuck with the state OAP pension, which is a set amount of money every week and is at the whim of the government to raise, lower or do away with even if they want. Also the government can arbitrarily raise the age of retirement or place other criteria such as amount of PAYE payments made in order to qualify. There is no contracts and no guarantees with the OAP pension which the PAYE worker draws upon reaching retirement age. Thus we are left with making pension provisions for ourselves in the financial market, through defined contribution pensions managed by Banks, Insurance companies and other financial institutions. Yes we get tax breaks in doing so, however as they are defined contribution pensions, we PAYE workers have no guarantee of what will be there waiting for us at the end of the term. It could be a nice figure, it could be nothing. I do know of some people whos pensions were wiped out during the last financial crash and they were essentially left with nothing to show for years of prudent saving. And I dont care what anyone says…I dont and wont ever trust anyone in the financial industry because as has been shown on many occasions they are not there to serve the public, they are there to generate profits through transactions and management fees. And they get paid whether or not your pension goes up…or down. As such our pensions are purely at the whim of the markets.
Now, given a choice of a state defined benefit pension which guarantees a pension amount at retirement and is contractually obligated to pay that amount, or a private defined contribution pension which gives no guarantees of performance and payment at the outcome. Also we have to purchase an annuity at the end which is essentially giving a financial company our pension, minus a lump sum payment, for them to dole out to us every month. To my knowledge the public sector pension has no such requirement.
The system is so set up that the public sector does not want its pensions liable to the whims of the markets and they guarantee their employees an outcome which will be there waiting for them, come hell or high water. It also costs the tax payer, as essentially these pensions arent paid for through investments or financial products, but solely through government spending, which is through taxation.
As per usual, there is a cushy deal for the public sector worker, and the private sector worker is left to the whim of the markets…with the only safety net being the OAP. If they take that away, or reduce it over time, or force the PAYE worker to work until we are in our 70's then that, as usual, is a gross dereliction of care towards the elderly in society. But the government dont care. They will get their nice cushy pensions, public sector pensions, and live happily ever after, safe in the knowledge that they will have nothing to worry about in old age. While the rest of us make do as best we can, by either trusting the market and the financial institutions operating within it…or saving what we can and hoping the OAP will still be around to provide a minimum of support in old age.
And say what you like as a pension provider, you aren't in this to provide a service to the public because you care about us. You simply want our business so you can charge fees and rake in money. Thats it.
I started private pension 5 years back and contributed for 3 years, then I stopped that one changed to company pension. Took the broker's advice whatever way as I knew so little about the whole thing. Contributed 3 years about total 90K. Management fee 1% per annual. that 90k has only grown to value 97k today. I so agree with you that "let me have the freedom to invest myself " instead of paying all the high fee to the management company.
Lack of flexibility on how to invest your private pension is a shame that only favours the financial industry. Should be same as US.
I agree I think we should support our own. Thats probably the best solution out of all of them.
Can you please do a video on private pensions and the not transparent fees?
We have companies that take astronomical fees with no transparency. The choice of companies is limited. There is an acceptance of such fees because of the tax relief.
I think u don't get that the tax relief is not for you but to give business to the companies who manage the funds.Over the years most of the relief is eaten up by fees.
This is an extremely privileged take on things. Workers pay tax all throughout their lives and part of that deal is that a pension is provided for them in retirement. Private pension is an add on for those that want to make good financial decisions
Fantastic video Dan! Question, what happens if you don't reach retirement age? How are state and private pensions affected?
Some great points made, especially regarding financial literacy of the general population!
Looking forward to the next one
As a young person in Ireland with a stem degree, I’ve started applying for jobs in other countries. Between rents, pensions and national debt, the young in Ireland will be paying for the previous generations pensions and mortgages.
Ireland’s economy has become one huge Ponzi scheme waiting to burst.
Great video! Really enjoy watching your channel as I'm moving to back to Ireland after about 12 years away so it's a good refresher on how things work…or don't in this case!
As someone in my 40's with no pension i should be investing 25% of my savings in a pension?