Q – I am 41 years of age, married with 3 children aged 8, 5 and 2. I am joining a new company 10th September on a better salary ( € 78k ) and good prospects. However I have absolutely no pension provision and just wonder should I wait for auto-enrolment in 2025 ? There is the usual 5% employer contribution if I match it now. Any advice ?  Paul – Cobh Co Cork

A – You are quite right to raise this issue Paul and well done on the new job and family. We are on a pension time bomb here in Ireland. By the year 2050, there will be 1.8million citizens over the age of 66 – there are c. 800,000 over the age of 66 currently – and we will have less than a third of the working population then to fund those pensions.. Another fact is that half of the current earning population of Ireland does not have a pension. They are obviously hoping that the State Pension (which is € 277.30 per week currently) will be enough to tide them over at that stage AND that the government will still have the funds to be able to pay it when they reach retirement age. The most important question of course is can you afford ANY contribution. Only a detailed household budget will elicit this answer. With three hungry mouths to feed in the family things will be tight over the next 15 – 20 years for your family. While 5% contribution is totally inadequate, it is better than nothing especially when the employer is paying 5% for free. Auto-enrolment may see employers being forced to contribute up to 6% after 10 years – time will tell but I would forge ahead NOW. At your age, you are eligible to invest 25% of your net relevant earnings or € 1,479.17 per month to maximise the tax relief, net € 887.50 per month at 40% tax relief. If you can afford it, it is certainly worth it. Remember all growth in the fund is tax free and you can look forward to 25% of the fund as a tax free lump sum on retirement or 1½ times your final salary depending on the structure you have in the company. In my view, it’s never too early to start a pension. Best wishes.

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