Impact of delay in starting a pension

The longer you delay starting a pension plan, the more it costs to produce the same fund. For example, if you start contributing €200 pm to a pension plan at age 30, increasing in line with earnings, it might produce a retirement fund of about €205,000 at age 65.

But if you delay starting until a later age, the initial contribution required to produce the same fund at 65 increases sharply:

For example, if you delay starting the  pension plan for just 6 years, i.e. until age 36, you will then have to start contributing at €282 pm to the pension plan to produce the same estimated fund at 65 as you might get by starting your pension now at age 30 at a €200 pm contribution.

If you delay starting until age 40, then you will then have to start contributing at €363 pm to the plan to produce the same estimated fund at 65. In each case the initial contribution is assumed to increase in line with your earnings over the period to age 65.

So delay costs money, your money.
Source: Technical Guidance

 [1] assuming a 2.75% pa return, after charges and expenses, and that your earnings will grow by 2.5% pa. This projected fund and initial monthly contributions are an illustration and are not guaranteed. The actual maturity value and monthly contributions required to produce that maturity value could be higher or lower than shown as they will vary by your actual earnings growth and investment return, after charges, achieved. 

Previous news 2016

Almost half of Irish people want to retire in the sun or by the sea … on €3k p.a.

Average person needs €30k p.a. to live on in retirement but is saving just 1/10 of this 

A recent survey* commissioned by Standard Life of 1,000 respondents reveals 49% or almost half of Irish people would like a home in the sun or by the sea when they retire. A home in the sun is more sought after than one by the sea or in the country. The single biggest preference (at 29%) was for individuals to stay in their current home. The second most popular choice was to have a home in Ireland combined with a home in the sun.

  • Just 13% of people would like to retire to the country. This choice is most popular with 22% of 25 to 34 year olds opting for a country life. 
  • For those aged 65+, their top choice is a home in Ireland and a home in the sun with 56% choosing this option.    

Where do you want to live in retirement?

I want to stay in my current home 29%
I would like a home in the sun and a home in Ireland 24%
A home in the sun (Spain, Portugal, France etc.)  14%
A home in the country 13%
A home near the sea 11%
I want to stay in the same area as my current home but in a smaller property 9%
  • When asked: How much total income do you think you need to retire on to live comfortably? The average income chosen by respondents was €31,230.

The average person has saved a retirement income of €3,106 p.a.** This represents just 10% of their desired €30k p.a. retirement income. This excludes the state pension of up to €12,000 p.a. which not everyone is entitled to, nor is everyone entitled to the full amount necessarily. It should also be noted the state pension is expected to fall in real terms in the future as its long term affordability is in serious doubt.

“People have high expectations from their retirement and want to really enjoy it. An affordable home in the sun is do-able, but you need to save adequately for it,” said John McInerney, pensions technical manager with Standard Life. “My advice is to calculate how much you need to buy your house in the sun and how much income you need to live on comfortably. Sit down with a financial adviser and work out how much you need to save between here and your retirement. Then you can look forward to it,” he said.

Even if you include a full state pension in addition to the €3,106 p.a., you’re still barely above €15k p.a. which is not a realistic amount to own a house in the sun and live comfortably, according to McInerney.


"People have high expectations from their retirement and want to really enjoy it"

John McInerney

Previous media releases 2016

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