August 23, 2023
What Is the Average Pension in Ireland? (Stats, Factors, Tips)
Find out the average pension in Ireland and if that’s sufficient for your retirement. Also, learn what factors affect pensions and how to boost your savings.
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The average pension in Ireland is approximately €104,000, according to surveys conducted in 2022.
Is this enough to sustain yourself in retirement?
What’s considered a good pension pot?
We’ll answer these questions and break down Ireland’s average pension.
According to a 2022 Pension Support Line study , the average pension pot of Irish employees at retirement is about €104,000.
The same study also found that employees expected to receive a pension pot of around €433,000 at retirement — much higher than the average pension of €104,000.
Why is the average pension not sufficient?
According to Numbeo , Ireland is the 17th most expensive country to live in, which makes it essential to have a substantial pension pot.
Now one of the crucial factors affecting your pension pot is inflation.
Ireland’s core inflation rate (which excludes volatile food and energy costs) remained at 6.6% in July 2023 , mainly due to higher mortgage interest rates and transport costs.
Some experts predict that prices will continue to rise slowly in most sectors — even though the general inflation rate seems to be falling .
For instance, did you know Diageo recently announced a 4% hike in the price of its pints? 
This is after a 12% hike in February 2023!
Bottom line: At the current average pension rate, most individuals won’t be able to afford a basic standard of living post-retirement in Ireland.
That’s why ALONE (a national charity) has asked the government to benchmark the State Pension and increase it by at least €27.50 per week in 2023 .
But how many people rely on the State Pension?
Let's take a look.
A 2022 Pension Coverage survey  conducted by Ireland’s Central Statistics Office observed that:
The State Pension was the primary income source during retirement for 57% of workers without pension coverage. This is concerning because the State Pension amounts to just approx. €13,800 a year, which is insufficient to cover one’s living expenses in Ireland.
Only 66% of employees had some pension coverage, like a personal or occupational pension scheme, apart from the State Pension.
Defined contribution (DC) pensions covered 62% of employees enrolled in occupational schemes from their current employer, while defined benefit (DB) pensions covered only 32%. This shows that DC pensions are more popular than DB plans in Ireland.
Pension coverage was lowest among young workers — only 31% of workers aged 20-24 had some form of pension coverage.
So you may be wondering…
A "good pension pot" is subjective, and your retirement pension may differ based on your salary, requirements, and circumstances.
Financial advisors typically recommend aiming for 50% of your gross pre-retirement income  as a pension. So if you earned €75,000 per annum before retirement, you’ll need an annual income of at least €37,500 in retirement.
Let’s look at rough estimates of what you should aim to accumulate in your pension pot throughout your career.
Note: We calculated these estimates using Ireland’s average wage for full-time workers, which is around €44,202 (pre-tax) per year, according to a 2023 survey by Morgan McKinley .
Average Pension Pot at 30: A 2023 study by Fidelity  suggests having 1x your salary in your pension pot by the time you’re 30. Considering Ireland's average wage is about €44,202 per year, you should aim for a pension pot of the same amount by 30.
Average Pension Pot at 40: By age 40, you should have at least 3x your salary  in your pension pot, which would be approximately €132,606.
Average Pension Pot at 50: At 50, you should aim to have 5x your salary  saved in your pension pot, making it approximately €221,010.
Average Pension Pot at 60 and Above: By 60, you should aim to have 8x your salary  in your pension pot, which amounts to approximately €353,616. At retirement age (usually 66), your pension pot should have 10x your salary , amounting to €442,020.
Since these estimates are based on Ireland’s average wage, they may not resonate with your current salary. This information should be treated only as a guideline, not as financial advice. For accurate pension advice on your personal situation, please consult certified financial experts.
Is your pension pot smaller than you had expected?
Let’s find out why.
Some factors that affect pension entitlements are as follows:
Your pension entitlement may differ based on the scheme you have opted for.
For example, at retirement, some schemes provide a fixed pension amount based on your salary and other conditions, whereas the returns of some schemes depend on investment performance.
Three types of pension schemes are available to Irish citizens:
State Pension: The State Pension (Contributory) and the State Pension (Non-Contributory) are two social welfare payments made by the Irish government to people aged 66 and above.
Occupational Pension: An occupational pension scheme is offered to employees by their employers. A defined contribution pension scheme is Ireland’s most common occupational pension scheme.
Personal Pension: Personal pension (aka private pension) plans are availed by self-employed people or employees whose employer doesn’t offer an occupational pension. There are two types of personal pensions — Retirement Annuity Contracts (RAC) and Personal Retirement Savings Accounts (PRSA).
The more you put into your pension pot, the better entitlements you get.
Consider increasing your contribution levels if your employer also contributes to your pension. Your employer may sometimes match your contributions (up to a specific limit), resulting in a larger pension pot.
Obviously, a higher income level will allow you to make larger contributions toward your pension pot. You should consider how an increase or decrease in salary may impact your pension pot.
As goods and services get more expensive, your pension pot’s purchasing power reduces. Sound investment decisions and professional financial advice can help to prevent these losses.
Ireland's average life expectancy rate as of 2021 is 82 years.
How does that affect pensions?
You may need a larger pension pot to sustain yourself after retirement.
For instance, if you retire at 66 and live until 82 (average life expectancy in Ireland), your retirement fund should last 16 years.
Learn about the Retirement Age in Ireland.
As a result of rising life expectancy rates, the Irish government increased the State Pension age from 65 to 66 in 2014. Although it was expected to rise to 67 in 2021 and then to 68 by 2028, no provisions for change have been made as of August 2023.
It depends on your age and the pension scheme you’re in.
Let’s look at Ireland’s three pension types to understand when you can claim your pension income:
State Pension: The State Pension is only paid to people aged 66 and above.
Occupational Pension: In most cases, you can claim an occupational pension when you reach the retirement age of 65 or 66, depending on any contractual provisions for mandatory retirement age. However, you can also claim your pension income at 50 if your employer and scheme trustees permit.
Personal Pension: You can claim your pension income at 60 by investing in an Approved Retirement Fund (ARF) or purchasing an annuity. You can also claim your pension income at 50 by taking an early retirement if you have retired from PAYE (Pay As You Earn) employment and are not working elsewhere.
Want to increase your retirement savings?
Here’s how you can do that:
Start Saving Early: Starting pension savings early leads to higher investment growth, resulting in a larger pension pot that could sustain your standard of living during retirement. So if you haven’t started saving yet, we recommend doing it right away.
Define Your Retirement Goals: Defining your goals will allow you to make realistic pension-saving decisions. Once you have decided what you want, you can focus on expenses like healthcare and travel.
Evaluate Your Investment Performance: Regularly review your pension fund performance against relevant benchmarks to make informed decisions. Also, consider if the value of your fund aligns with your retirement needs.
Seek Professional Advice: Understanding the performance of your pension fund can be complex. Seek financial advice from a qualified financial adviser who can help with retirement planning. They can analyse your investment strategy to ensure you’re on the right track.
Here are the answers to some commonly asked questions on Irish average pensions.
The fees pension providers may charge to manage your investments typically consist of the following:
Annual Management Charge (AMC): This ranges from 0.5% to 1.5% on average and is based on the value of your savings each year. The charges may differ across funds.
Entry fees/charges: Usually between 2% to 5% of your contributions. This fee applies to the money you invest in your pension fund.
Policy fee: A fixed monthly payment of around €5 that covers administrative expenses.
Once the Irish government implements the auto-enrolment scheme (expected to launch in early 2024), these charges will be capped at 0.5% to cover all administrative and investment service charges.
Understand Ireland’s Auto-enrolment Scheme in detail.
All occupational pensions and social welfare payments from the Department of Social Protection are subject to tax under the PAYE system. However, you don’t have to pay USC (Universal Social Charge) and social insurance (PRSI contributions) on social welfare payments.
If you’re above 66, you’re liable to income tax on your annual retirement income.
The first part of your income is taxed at 20% based on the standard rate cut-off points, and the remaining income is taxed at a higher tax rate of 40%.
When you retire, you can claim a portion of your pension as a tax-free lump sum (up to a specific limit) based on some conditions.
Learn more about Tax Relief on Pension Contributions in Ireland.
If you don’t have a workplace or private pension pot to support yourself in retirement, you can avail of the State Pension.
As of 2023, the maximum weekly rate of the State Pension (Contributory) is €265.30 per week (€13,800 per annum).
If you don't qualify for the contributory pension, you can avail of the State Pension (Non-Contributory). It’s paid at a weekly pension rate of €254 per week if you're under 80 years of age and at a rate of €264 per week if you're 80 and above.
In Ireland, 52% of workers  don’t have access to an occupational pension because their employers don’t offer one.
As a result, most Irish employees become dependent on the State Pension, which isn’t sufficient to sustain them during retirement.
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1. Pension Support Line IE - What is the average pension in Ireland?
2. Numbeo - Cost of Living 2023 Mid-Year
3. The Irish Times - Irish inflation falls to 18-month low of 5.8% - 2023.
4. Irish Examiner - Forget headline about inflation- consumers must brace for price hikes -2023
5. Breaking news.ie - Cost of pints to increase again as Diageo hike prices - 2023
6. Alone - ALONE’s Annual Cost of Living Survey
7. Central Statistics Office - Pension Coverage - 2022
8. Irish Examiner - You can retire well on 50% of your gross income - 2022
9. Morgan McKinley - 2023 Salary Guide Ireland
10. Fidelity - How much do I need to retire - 2023
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