According to a report by Royal London, Irish workers believe they will need approximately €40,860 per year to enjoy a comfortable retirement. This finding is consistent with the “Irish Retirement Living Standards” (IRLS) report produced by KPMG in 2024, which established that a comfortable retirement for a couple requires an annual expenditure of around €43,200.
A comfortable retirement is defined as the ability to take holidays, enjoy hobbies, maintain health insurance, and deal with unexpected costs. To achieve this level of retirement income, a 30-year-old earning €61,908 per year would need to save €1,135 per month, assuming they will also receive their full state pension.
Retirement Savings Challenges
The earlier retirement people aspire to, the wider the gap becomes between what they need in retirement and what they are currently saving to fund it. According to a survey by Royal London in March 2025, almost 72% of respondents hoped to retire between the ages of 50 and 60.
Ireland’s net voluntary pension replacement rate is just 36%, compared to an EU average of 68%. This means that for every €100 earned during working life, Irish private pensions replace just €36 in retirement income, with a heavy reliance on the state pension.
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Pension Participation and Replacement Rates
Despite Ireland’s participation rate in voluntary pension plans being comparatively high at 66%, the issue appears to be not whether people save, but whether they save enough. The low replacement rate data suggests that many Irish pension savers are contributing at levels that will not generate the retirement incomes they aspire to achieve.
Among those aged 45 to 54, 55% said they could not afford a pension, citing affordability as the most significant issue. Cost-of-living pressures, including rising energy bills, healthcare costs, and insurance premiums, also contribute to the diminishing ability to save.
Addressing the Root Causes
The reality is that none of this information is new, and policymakers are aware of Ireland’s pension replacement rates lagging European norms. Auto-Enrolment is a welcome step, but there is a danger in assuming that increasing participation alone will solve Ireland’s retirement savings challenge.
CPAS Pension Consultant STEPHEN LAWLESS examines why high participation rates aren’t translating into retirement security in Ireland, arguing that closing the pension gap requires tackling everyday affordability rather than relying on policy fixes alone. Policymakers must also address the broader cost-of-living pressures that prevent households from building adequate retirement savings in the first place. The CIF Pension Administration Services (CPAS) team are qualified Pension Consultants, specialising in helping professionals in the construction sector and related industries, and can work with individuals to review their pension plans.
