Over 75% of financial advisers say date for pensions auto-enrolment will not be met

The new scheme will see 750,000 people who don't currently have pensions be automatically signed up for one in 2024.
Over 75% of financial advisers say date for pensions auto-enrolment will not be met

More than 75 per cent of financial advisers think the Government will not make their pension auto-enrolment target date of January 2024.

The new scheme will see 750,000 people who don't currently have pensions be automatically signed up for one in 2024.

The scheme is set to apply to all workers earning over €20,000 a year.

The auto-enrolment is due to be rolled out from early 2024 and phased in over ten years in an effort to allow businesses time to prepare for the extra cost.

However, a survey carried out by the Independent Trustee Company found that almost a quarter of advisors think the auto-enrolment may never happen.

Glenn Gaughran, of the Independent Trustee Company, commented: “Despite the fact that last month, the final design principles for the Automatic Enrolment Retirement Savings System for Ireland were announced, much of the industry appear unconvinced that auto-enrolment will be operational any time soon.

“In fact, almost one in every four financial advisors we asked said that it would be 2026 before it was available to workers – or perhaps never at all.

“We are conscious that there is still a huge level of work to do in terms of designing the system, and the department will need to agree terms with at least four commercial providers.

“Based on our assessment, the first few years are likely be loss-making for the participating providers, so they are likely to look for a long-term commitment from the Government for the provision of these services.”

Mr Gaughran also noted that some advisers believe the scheme could reduce demand for regular pensions if consumers decide not to act on the own and just rely on the auto-enrolment for their pension.

“If this were to happen it would certainly be a cause for concern as experience suggests that people who take out a pension themselves typically contribute far more that the contribution levels indicated in the new scheme.

“Auto-enrolment is really designed for those who would not otherwise have started a pension – rather than for those who would.”

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