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RTÉ News
17-06-2025
- Business
- RTÉ News
Everything you need to know about pension auto-enrolment
Auto-enrolment is a pension policy mechanism designed to increase participation in workplace pension schemes by automatically enrolling eligible employees, while employers also make a contribution. It aims to enhance retirement savings, reduce reliance on state support, and promote financial security for retirees. Ireland, like many other countries, has been exploring or implementing policies related to auto-enrolment for years to address demographic shifts, aging populations, and the need for sustainable pension systems. A time has been scheduled to implement a system in January 2026. John Lowe of states the facts. Background Ireland's pension system is a multi-pillar structure comprising the State Pension (contributory and non-contributory), occupational pensions, self-administered structures and voluntary personal savings. Historically, participation in occupational pensions has been voluntary, leading to concerns about low coverage rates, especially among low-income earners and those in smaller firms. In recent years, policymakers have recognised the need to bolster retirement savings and have considered auto-enrolment as a means to improve pension coverage. The rationale for auto-enrolment Several factors underpin the push toward auto-enrolment in Ireland: Ageing population. Ireland, like many European countries, faces demographic challenges with increasing life expectancy and declining birth rates, leading to a higher old-age dependency ratio. In 2021, for every retired person, there were five workers to fund the state pension. In 2051, there will only be two but three times the number of retired persons! Low Pension Coverage. Many Irish workers do not participate in occupational pension schemes, particularly those in small firms, part-time roles, or low-income brackets. Less than half the working population of Ireland have nothing to look forward to other than their state pension, if it is still there, then… Financial security. Ensuring adequate retirement income is vital to prevent older adults from relying excessively on state support or experiencing poverty. It has all to do with planning, and sadly, there is little of that when it comes to pensions in Ireland. Behavioural economics. Auto-enrolment leverages inertia and default effects, encouraging participation without requiring active opt-in decisions. Key features of auto-enrolment While Ireland has to wait until at least next January to adopt a full-scale auto-enrolment scheme, the core features typically associated with such systems include: 1. Automatic enrolment: eligible employees are automatically enrolled into a pension scheme upon starting employment unless they opt out. The minimum age is 23, and the maximum age will be 60. First year contribution is 1.5% of annual income (divided by 12) from both the employee and employer. It increases over the next 10 years four times to 6% each, with the government contributing 2% then a total of 14% after 10 years. 2. Opt-out provision: employees retain the right to opt out within a specified period, respecting individual choice. The mooted period is two years. 3. Contribution rates: both employer and employee contribute to the pension pot, with minimum contribution levels often specified as outlined above. 4. Default investment options: auto-enrolled members are usually placed in default investment funds aligned with their age and risk appetite. 5. Employer and government role: employers facilitate enrolment, while governments provide both incentives and regulatory frameworks to support the system. Current state of auto-enrolment in Ireland As of June 2025, Ireland has legislated for a nationwide auto-enrolment scheme comparable to the UK's Pensions Act 2008 to start in January 2026. However, several developments are noteworthy: Pension reform discussions: the Irish government has engaged in policy discussions about increasing pension coverage, with auto-enrolment now very much part of the agenda. Pilot schemes and studies: some pilot projects and research were conducted to assess feasibility, costs, and potential impacts. Regulatory environment: the Central Bank of Ireland and the Department of Social Protection oversee pension regulations, and any future auto-enrolment scheme that require legislative changes and regulatory oversight. Challenges and considerations Implementing auto-enrolment in Ireland involves various challenges: Cost and funding: determining who bears the costs - employers, employees, or government subsidies. Setting appropriate contribution levels to ensure adequacy without overburdening employers is also vital. Opt-out rates: understanding and managing opt-out rates is essential to ensure the scheme's effectiveness. Coverage and inclusivity: ensuring low-income workers, part-time employees, and those in small firms are adequately covered. Administration and infrastructure: developing the administrative capacity to manage auto-enrolment, contributions, and member communications. Financial education: providing adequate information to encourage informed decisions and long-term engagement. International lessons Ireland can draw valuable lessons from other countries' experiences: United Kingdom: the UK's auto-enrolment scheme, introduced in 2012, has significantly increased pension coverage. The UK model emphasises phased implementation, employer duties, and default options, which Ireland can adapt. Australia: the Superannuation Guarantee system mandates employer contributions with minimal opt-out, ensuring high coverage. Netherlands and Denmark: these countries have mature auto-enrolment systems with high participation rates, emphasising the importance of default funds, flexible contribution levels, and strong regulatory oversight. Potential benefits of auto-enrolment in Ireland Increased pension coverage: particularly among workers who might not actively participate in voluntary schemes. Enhanced retirement income: providing more substantial savings, reducing pension poverty. Economic stability: promoting long-term savings can contribute to economic resilience. Reduced reliance on state support: lessening the fiscal burden on the government. Potential risks and drawbacks Increased costs for employers: especially small firms, which might face administrative burdens. Participation fatigue: employees may opt out due to perceived costs or lack of understanding. Insufficient contributions: if contribution rates are low, pension pots may be inadequate. Market risks: members' investments are subject to market fluctuations, affecting retirement outcomes. Auto-enrolment represents a promising policy tool for Ireland to enhance pension coverage and ensure financial security for its ageing population. While the country has yet to fully implement a nationwide scheme – fingers crossed for next January - ongoing discussions, pilot projects, and international lessons point toward its potential benefits. Success will depend on careful design, stakeholder engagement, and addressing implementation challenges. As demographic trends continue to evolve, Ireland's proactive approach to pension reform, including auto-enrolment, could play a pivotal role in shaping a sustainable and inclusive pension system for future generations. If you'd like a more tailored focus or additional details on specific aspects of auto-enrolment in Ireland for you or your company, please let me know!
RTÉ News
03-06-2025
- Business
- RTÉ News
A financial advisor's tips for handling money after a divorce
Separation and divorce mark significant emotional and logistical transitions in life, and one of the most complex challenges faced during this period is managing finances before, during, and after. Advising couples and separating persons is now part and parcel of every financial adviser's armoury. Navigating the financial landscape, in particular post-separation, requires careful planning, clear communication, and a strategic approach to ensure both parties can move forward with stability and confidence. John Lowe of explores essential steps and considerations for balancing the books financially after separation or divorce. 1. Understanding your financial position The first step toward financial stability after separation is obtaining a clear picture of your current financial situation. This involves gathering all relevant documents, including bank statements, investment accounts, retirement plans, mortgage documents, credit card statements, and any other financial assets or liabilities. Creating a comprehensive net worth statement can help you understand your financial position. List all assets—homes, vehicles, savings, investments—and subtract liabilities like mortgages, loans, credit card debts, and other obligations. This snapshot provides a baseline to plan your financial future and negotiate fair divisions of assets. 2. Clarifying property and asset division One of the most significant aspects of balancing the books involves dividing assets and property. Laws governing property division vary from court to court —some follow equitable distribution principles, while others use community property rules. Working with a financial adviser or lawyer/solicitor to determine what assets you are entitled to and how to equitably divide them is a start. Consider not only tangible assets but also intangible ones like pensions or retirement accounts, which may require a Pension Adjustment Order (PAO) for division. 3. Establishing and adjusting budget Post-divorce or separation, your income and expenses may change dramatically. Revisiting and adjusting your budget is essential. Account for new expenses such as housing costs if you are renting or paying a mortgage alone, child support, maintenance, and ongoing healthcare costs. Prioritise essential expenses—housing, utilities, food, transportation—and identify areas where you can reduce discretionary spending. Creating a realistic budget will help you avoid overspending and ensure your financial needs are met. 4. Child support and maintenance arrangements If children are involved, establishing fair child support arrangements is critical. These are often determined based on income, custody arrangements, and applicable legal guidelines. Ensure agreements are documented legally to prevent future disputes. Similarly, if maintenance is part of your settlement, understand the terms—amount, duration, and payment schedule. Both parties should keep thorough records of payments to avoid misunderstandings. 5. Managing debt Divorces often lead to the assumption or transfer of debts. Clarify who is responsible for existing debts and ensure that joint accounts are closed or transferred appropriately. Paying off high-interest debts early can reduce financial strain and improve credit ratings. It's vital to communicate with creditors if you're transferring debt responsibilities or making significant changes to account holders to prevent missed payments or credit issues. 6. Updating legal and financial documents After separation, updating legal documents is essential. This includes changing beneficiaries on insurance policies, updating wills and estate plans, and revising enduring powers of attorney. These steps ensure your assets are protected and distributed according to your wishes. Consult with legal professionals to understand the requirements for updating these documents. 7. Planning for the future: retirement and investments Divorce can significantly impact retirement planning. Review your retirement accounts and consider how to rebuild savings if needed. Sometimes, dividing retirement assets can be complex, requiring legal guidance to ensure compliance with tax laws and regulations. Mediation would be better if you both could agree as it will likely save you money. Establishing new investment strategies aligned with your current financial goals will help secure your long-term financial health. 8. Building emergency savings Post-divorce life can bring unforeseen expenses. Building or replenishing an emergency fund—covering three to six months of living expenses—is a wise strategy. This safety net provides peace of mind and financial stability during transitional periods. 9. Seeking professional assistance Given the complexities involved, working with financial professionals can be invaluable. Certified Financial Planners (CFPs), accountants, Qualified Financial Advisers (QFAs) and divorce financial specialists can help you develop a comprehensive financial plan, navigate asset division, and plan for future needs. Legal counsel can also be essential for ensuring your financial agreements are enforceable and in your best interests. 10. Emotional and financial resilience Finally, balancing the books after separation isn't solely about numbers. It requires emotional resilience and patience. Financial decisions made during this period can have long-term consequences; therefore, approaching them thoughtfully and deliberately is vital. Building a support network of professionals, friends, and family can provide guidance and reassurance as you navigate this challenging transition. Financial stability after separation or divorce is achievable with proactive planning, informed decision-making, and professional guidance. By understanding your financial position, adjusting budgets, managing debts, updating legal documents, and planning for the future, you can regain control and lay the foundation for a secure financial future. Remember, while the process may seem daunting at first, taking systematic steps will help you balance the books and move forward with confidence.
RTÉ News
27-05-2025
- Health
- RTÉ News
Financial tips for making the most of your food shop
In today's world, many families find themselves confronting the harsh reality of limited finances, especially when it comes to providing enough food - and nutritious food at that - for their loved ones. Food insecurity is a challenge that affects millions globally and can be a source of stress, anxiety, and hardship. If you find yourself with little money to buy food for your family, understanding how to make the most of your resources and access available support can make a significant difference. John Lowe of explains. Understanding food insecurity Food insecurity occurs when individuals or families lack reliable access to sufficient, affordable, and nutritious food. It's not just about hunger but also about the quality of the food available. When finances are tight, families often have to make difficult choices, sometimes sacrificing nutritious options for cheaper, less healthy foods, which can impact overall health and well-being. Strategies for managing limited food resources 1. Create a budget and meal plan. Start by assessing your income and expenses. Determine how much you can allocate to food each week. Then, plan meals around affordable ingredients. Focus on simple, nutritious dishes that can be made in bulk, such as rice, beans, pasta, and seasonal vegetables. 2. Prioritise nutrient-dense foods. Choose foods that provide maximum nutrition for the least cost. Legumes, such as lentils and chickpeas, are inexpensive sources of protein and fibre. Frozen vegetables are often cheaper than fresh and retain most of their nutrients. Whole grains like oats and brown rice are filling and affordable. 3. Shop smart. Buy in bulk: Purchasing staples like rice, beans, and oats in bulk can save money over time. Use coupons and discounts: Look for store promotions, discounts, and loyalty programs. Compare prices: Check different stores or markets for the best deals. Buy store brands: Generic brands often offer quality comparable to name brands at a lower price. 4. Utilise food assistance programmes. Many communities offer programmes to support families during tough times. Food banks and pantries: Local organisations often provide free or low-cost food. Food stamps: The European Social Fund Plus (ESF+) Food and Basic Material Support helps support people take their first steps out of poverty and social exclusion. Ninety per cent of the funding comes from the EU, with the balance coming from the Irish Exchequer. The Department of Social Protection manages this programme in Ireland. Community meals and soup kitchens: These offer free hot meals for those in need. 5. Cook at home and avoid eating out. Preparing meals at home is generally more economical than eating out. It allows you to control ingredients and portion sizes, reducing overall costs. 6. Involve the whole family. Engage children and other family members in meal planning and preparation. This not only teaches valuable skills but also makes them more invested in healthy eating habits. 7. Grow your own food. If possible, start a small garden or allotment with herbs, vegetables, or fruits. Even a few containers on a balcony can yield herbs or salad greens, reducing grocery costs. Maintaining physical and mental well-being Food insecurity can take a toll on mental health. It's important to seek support from community resources, friends, or family members. Staying connected and sharing your concerns can provide emotional relief and practical advice. Getting involved in community efforts or advocacy groups can help raise awareness about food insecurity and influence policies to improve food assistance programs. Long-term solutions While immediate strategies are vital, consider long-term plans: Enhance skills: look for job training programmes or educational opportunities to increase income. Financial planning: seek free financial counselling to better manage your money. Community support: build relationships with local organisations that can provide ongoing assistance. Facing food scarcity with limited funds is undeniably challenging, but with resourcefulness, community support, and strategic planning, families can navigate these difficult times. Remember, seeking help is a sign of strength, not weakness. Local food banks, assistance programmes, and community networks are there to support you. Prioritise nutritious, simple meals, make informed shopping choices, and engage your family in meal preparation. By taking these steps, you can ensure your loved ones are fed and cared for, even when money is scarce.
RTÉ News
13-05-2025
- Business
- RTÉ News
Is it too early to think financially about next Christmas?
The memories of tinsel, Christmas pudding and presents feel very far away from us as summer gets into full swing, so thinking financially about next Christmas might feel utterly preposterous - like suggesting you start planning your retirement on your first day of work. However, while it might seem premature, it's absolutely not too early to start considering your financial approach to the next festive season. In fact, it's arguably the most strategic time to do so. John Lowe of explains. The months following Christmas offer a unique perspective. The reality of post-holiday debt might still be palpable as you start thinking about summer holidays, communions, birthdays and more, and the resolutions for a more financially disciplined year are often at their peak. This is a prime opportunity to analyse what went right and what went wrong. Most importantly, it's a chance to think about how to make the next Christmas less of a financial strain and more of a joyous occasion. One of the most significant benefits of thinking ahead is the power of compounding savings. Even small, consistent contributions throughout the year can add up to a substantial sum by December. Imagine setting aside just €20 a week starting now. By the time next Christmas rolls around, you'll have saved over €600. This might not cover everything, but it's a significant chunk that can alleviate the pressure of a last-minute spending spree. This approach transforms Christmas spending from a sudden, overwhelming expense into a manageable, gradual process. Early financial planning allows for strategic budgeting. Instead of a reactive, panicked approach in December, you can calmly assess how much you realistically want to spend on gifts, food, decorations, travel, and other festive activities. You can create a detailed budget, allocate funds to different categories, and track your progress throughout the year. This proactive approach provides a sense of control and prevents the common pitfall of blindly overspending. Thinking ahead also opens the door for smarter shopping. Sales and discounts happen throughout the year, not just in the mad rush of Black Friday. By planning early, you can take advantage of off-season deals, clearance sales, and promotional events. That perfect gift for 'Aunt Carol' might be significantly cheaper in July than in December. This not only saves money but also reduces the stress of last-minute gift hunting in crowded stores. Beyond just saving money, early financial planning for Christmas allows for a more thoughtful and personalised approach to gift-giving. With time on your side, you can consider handmade gifts, experiences, or gifts that are truly meaningful rather than resorting to rushed, generic purchases. This can lead to more cherished presents and a deeper connection with loved ones, all while potentially saving money. Finally, and perhaps most importantly, thinking financially about next Christmas now can significantly reduce stress and anxiety during the holiday season itself. Knowing you have a plan, that you've been saving, and that you're not facing a mountain of debt can make the festive period much more enjoyable and less about worrying about the financial aftermath. Of course, it's important to be realistic. You don't need to have every single gift planned and purchased by the end of June. The goal is to establish a foundation, a mindset of preparedness. Start with small steps: set a preliminary budget, open a dedicated Christmas savings account, and commit to putting aside a small amount regularly. While the idea of contemplating next Christmas's finances might feel premature in the immediate post-holiday period, it's actually the most opportune time to do so. The lessons learned from the recent festive season are fresh, and the opportunity to leverage the power of consistent saving and strategic planning is at its peak. By taking a proactive approach now, you can transform next Christmas from a potential financial headache into a truly joyful and stress-free celebration. So, no, it's not too early. It's precisely the right time to start thinking financially about next Christmas.
RTÉ News
29-04-2025
- Business
- RTÉ News
5 things to stop buying to save money fast
When it comes to saving, as Ringo Starr once sang, "it don't come easy", but any bit of extra money you can save from now on will be worth the short-term pain. You can never have enough savings. Ideally, you should have between three and six months' net annual joint income in a Rainy Day Fund (RDF) for those emergencies (your clutch goes), sudden loss of income (no bonus this year) or that investment opportunity (buying a Le Broquy for half nothing). So what's the easiest way to save? Spend less! It doesn't have to be difficult – one of the biggest stumbling blocks people meet arises as a result of setting unrealistic goals. You don't need to go without your day-to-day essentials in order to save money, but tightening up what meets your definition of "essential" can certainly help. Here, John Lowe of identifies five things you can feasibly go without today, to help you save money fast. 1. The daily coffee It's the number one recommendation when conversations like this arise. If you're spending €3 each workday morning on a takeaway coffee, that's €65 per month – or over €780 per annum or €1,600 per annum gross. To earn that, if you are a top-rate taxpayer, you would have to earn over €134 per month gross, and that's just for the coffee! Consider getting your caffeine fix at home and taking it with you in a travel mug. If you really can't sacrifice your daily café trip, at the very least, bring a keep cup – many places now offer discounts to people who don't require a disposable coffee cup. 2. Bottled water In a similar vein as above, but a much easier option: there should be no need to buy bottled water in Ireland – it's one of the biggest marketing coups of all time! Invest in a safe, reusable bottle or canister and drink tap water to your heart's content. Ask for tap water in restaurants – it's fashionable and cheaper! 3. Takeaways With services like Deliveroo and JustEat, you can get anything to eat, from anywhere in your locality, without leaving your chair. Takeaway food has become easier and easier to source – and to rely on. Of course, it's nice to treat yourself on a Friday, but takeaways are not the cheap option they once were, nor are they the healthiest. Set yourself the challenge of cooking in batches and preparing your health-driven meals at the weekend – and see how much money you save, not to mention your health. 4. New clothes This is obviously a short-term fix: can you go without adding to your wardrobe between now and the end of the year? If I had to join a retail store sales queue in Dublin, especially at Christmas time, I think I would be happy with what I have! Only buy what you need – how many of us, including myself, have clothes in our wardrobes that have not been worn for years? 5. Get ruthless about the weekly/monthly shop If you know how much you usually spend on grocery shopping, make a note of it. If not, take a look back at your recent receipts. Then cut that figure by 10 per cent and stick to it. If that means buying own-brand products, switching to a discount shop for certain items like household cleaning, or cutting out unnecessary purchases like sugary snacks or drinks, so be it. Then, commit to making a list before stepping into your local supermarket. Be strict with yourself: if it's not on the list, it doesn't go in the trolley. I guarantee you will save money. There are many other ways to save money, but whatever you do, start.
