New research from the Economic and Social Research Institute (ESRI) has found that occupational pension coverage has limited impact on the timing of retirement.
The study shows that employees with occupational pensions plan to retire earlier, around age 63.5, compared to those without occupational pension coverage (close to the State pension age of 66).
“The gap between planned and actual retirement age is particularly pronounced among women without occupational pension coverage, who retire on average at around 58.5 despite planning to retire closer to 66,” according to the research.
The study also found that those without occupational pension coverage face substantially lower incomes in retirement.
“Individuals with occupational pension coverage have a median weekly retirement income of approximately €460, compared to €230 for those without coverage,” the ESRI found.
The results suggest that occupational pension coverage plays a crucial role in ensuring adequate living standards in retirement but has limited impact on the timing of workers exiting the labour market.
“While most employees retire earlier than they plan, those without occupational pension coverage face the greatest financial challenges,” said Dr Dora Tuda, an author of the report and Research Officer at the ESRI.
“They not only retire earlier than expected but do so with significantly lower incomes, raising concerns about financial security in older age, especially for women,” Dr Tuda said.
Increasing working hours alone will not eliminate in-work poverty – ESRI
A separate piece of research released today by the ESRI shows that increasing working hours would help some low-income workers escape poverty, but a substantial share would remain below the poverty line even at full-time hours.
Even when workers increase their hours to a maximum of 40 per week, many remain below the poverty threshold due to factors such as low wages and the number of dependents sharing household income.
The study found that there are also practical constraints when it comes to increasing hours such as care responsibilities, limited availability of full-time jobs, or health-related barriers, making longer working hours difficult or impossible.
The research highlighted a key role for the welfare system in supporting low-income workers, with significant scope to reduce in-work poverty through improved take-up of the Working Family Payment.
“Increasing working hours can make a meaningful difference for some low-income workers, but it is not always an option,” said Dr Karina Doorley, Associate Research Professor at the ESRI and co-author of the report.
“Many workers would remain below the poverty line even at full-time hours, highlighting the importance of in-work supports such as the Working Family Payment,” Dr Doorley said.
