Occupational pension coverage has limited influence on when people retire, according to new research from the Economic and Social Research Institute (ESRI), even though it plays a significant role in determining living standards after leaving the workforce.
The study finds that employees with occupational pensions tend to plan retirement slightly earlier, at around 63.5 years of age, compared with those without such coverage, who generally aim to work until close to the State pension age of 66. Despite these intentions, actual retirement patterns often differ from expectations.
Researchers noted a particularly wide gap among women without occupational pension coverage. On average, these women retire at around 58.5 years of age, even though they initially plan to remain in work until approximately 66. The findings suggest that financial pressures and labour market conditions may force earlier exits from employment than anticipated.
The report also highlights significant disparities in retirement income. Individuals with occupational pension coverage receive a median weekly income of about €460 in retirement, compared with roughly €230 for those without such coverage. The ESRI said this gap underlines the importance of occupational pensions in protecting financial stability in later life.
Dr Dora Tuda, Research Officer at the ESRI and co-author of the study, said the findings point to a clear divide in retirement security. She noted that while many workers retire earlier than planned, those without pension coverage face the greatest risks, particularly women, who are more likely to experience lower incomes and earlier exits from the workforce.
A separate ESRI study released alongside the pension research examines the role of working hours in addressing in-work poverty. It finds that while increasing hours can help some low-income workers improve their financial situation, it is not a comprehensive solution.
Even when employees work up to 40 hours per week, many still fall below the poverty line due to low wages and household pressures such as dependents relying on a single income. The study also highlights structural barriers, including care responsibilities, limited availability of full-time roles, and health constraints, which restrict the ability of many workers to increase their hours.
Researchers emphasised the importance of welfare supports in addressing these challenges. The report points to the Working Family Payment as a key mechanism for reducing in-work poverty, particularly for households where increasing working hours is not feasible.
Dr Karina Doorley, Associate Research Professor at the ESRI and co-author of the second study, said that while longer working hours can benefit some households, they are not a universal remedy. She stressed that many workers would remain below the poverty threshold even with full-time employment, underscoring the need for stronger in-work income supports.
