Confidence among those saving for retirement has declined here with almost half of Irish savers saying they are not optimistic about how they will fund their living costs when they finish working.
According to the latest Global Retirement Reality Report conducted by State Street Global Advisors, 46% of savers here said they were not optimistic about being financially prepared for retirement.
That was up from 40% in December of 2020.
About three in ten Irish respondents said they were worried about not being able to generate a consistent income stream in retirement.
"Against a backdrop of Brexit, the Russia-Ukraine War, political instability, and the fallout from Covid-19, it is not surprising that Irish savers are low-spirited about their futures," the report noted.
Retirement in Ireland is primarily funded through occupational pension schemes and the state pension system.
The occupational schemes are mainly Defined Contribution - made up of employee and employer contributions which are then invested and the proceeds are used to buy a pension or other benefits at retirement - or, less commonly nowadays, Defined Benefit schemes - which provide a set level of pension at retirement, the amount of which normally depends on service and earnings at retirement.
The contributory state pension here amounts to €265.30 per week.
That largely reflects the global picture with the top three sources of retirement income worldwide being employer-sponsored defined contribution plans, government entitlement and personal investments.
According to the SSGA study, a very low proportion of the population in the countries included intends to rely on strategies around property and inheritance as the primary source of income in retirement.
In Ireland, just 4% of respondents said they would use property rental income as their main means of pension provision - down from 9% in 2018.
Just 3% said they intended to 'downsize' to lower their overall expenses, down from 7% in 2018.
Cost of living squeeze
This latest study comes against the backdrop of decades-high inflation with cost of living increases hitting householders in most parts of the world.
Despite that, 62% of Irish savers said they made no changes to their pension contributions in the last year.
However, 13% said they had reduced their contributions over recent months.
That was notably higher than in the UK where an auto-enrolment pension scheme is already in existence, with a degree of 'inertia' evident among savers who are automatically included in savings schemes.
A similar scheme is expected to be in operation here by next year.
Under the plan, around 750,000 workers between the ages of 23 and 60, who earn over €20,000, will be automatically enrolled in a private pension scheme.
Employers and employees will match contributions and it's proposed that the State will add a top-up of €1 for every €3 invested by workers.
25% of Irish savers increased their pension contributions in the past year, a full ten points ahead of the equivalent figure for the UK.
Olivia Kennedy, Senior DC Investment Strategist with SSGA, described those findings as encouraging.
"Even though people are engaged and keeping an eye on their funds, it was rare to see people withdrawing from their pensions," she said.
"Inertia can't be underestimated. Once you're in a pension scheme, it can be an administrative thing so I think a lot of people don't get round to that," she added.
Among the other findings in this year's study, around four in five savers here said they were most concerned about budgeting in the early stages of retirement.
It's anticipated that a greater proportion of future retirees will be servicing mortgages or paying rent into retirement, putting a greater strain on retirement income, particularly in the early years of retirement.
"Mortgage and house debt was one the key reasons why people worried about retirment," Olivia Kennedy explained.
"Increasingly, people are taking out longer term mortgages and will be still paying later in life. That's partly why people are more concerned about the early [retirement] years.
"In addition, the current cost of living crisis and inflation levels that many people wouldn't have experienced before is making people think, if I want to stop working at 66, am I going to have enough?," she concluded.
