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After working hard for most of your life, when you reach retirement, wouldn't it be nice to have the money you need to maintain your standard of living? The current full rate State pension in Ireland for a person aged 66 or over is €248.30 per week. But will this allow you to achieve all your goals in retirement?

The Irish State pension is reasonably generous when to compared to other countries, however, Ireland’s population is growing and as people are living longer, our population is getting older too. The Government has been considering extending the age at which you receive your State pension and as the Country emerges from the restrictions imposed to combat the spread of the COVID virus we are likely to be left with debt levels never seen before.

This will have considerable implications for the State and its ability to finance the State Pension and other social spending in the long term. It is entirely possible that not only will the age of qualification be pushed out past 66, but also that the amount payable may come under pressure.

Therefore, if you are paying income tax on earnings you should be considering a personal pension provision to take control of your financial future, and the Government will effectively pay you to invest in a pension.

When making pension contributions you will be granted a tax relief benefit, this tax relief is given at your marginal (highest) tax rate. Put simply, if you pay the 20% tax rate, every €100 invested in a pension will cost you €80. This immediately increases your savings. If you are a higher tax rate payer the benefit is even greater. For every €100 invested in a pension, it will only cost you €60.

Your pension savings are invested in unit linked funds that can generate investment growth and all growth is added to your savings without a tax liability.

There are many different pension contracts and a wide selection of investment funds offered by a variety of Life Assurance Companies. By taking the right impartial advice you can ensure you arrange the most suitable policy and investment strategy for your circumstances, and this can be reviewed regularly and updated accordingly.

Pension planning is a long-term savings commitment, however, if your circumstances change you can increase or reduce the level of your savings and it is also possible to stop and restart your contributions if and when required.

There are no guarantees to the growth you will receive but the long-term nature of these savings and the impact of purchasing units at different prices each month will reduce risk. Compare 0% interest rates offered by bank deposits to a popular Zurich Life investment fund available to Irish investors since November 1989, which has generated annualised growth of 10.7%.

It is never too early to start saving, but by delaying saving until your later life, it can arguably become too late, so do not rely solely on the State Pension for income when you finish your working life.

Robert Downes, QFA RPA is a Qualified Financial Advisor. You can contact him through John F. Loughrey Financial Services by telephone on 074-9124002 or by email on robert@jfl.ie.