Find out the average pension in Ireland, assess if it meets your employees’ retirement needs, and explore ways to enhance their savings for a secure future.
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The average pension in Ireland is approximately €111,000, according to surveys conducted in 2024.
Is this enough to sustain your employees in retirement?
What’s considered a good pension pot?
We’ll answer these questions and break down Ireland’s average pension, helping employers understand how to better support their workforce's long-term financial well-being.
According to a 2024 Pension Support Line study [1], the average pension pot of Irish employees at retirement is about €111,000.
The same study also found that employees expect to receive a pension pot of around €433,000 at retirement — significantly higher than the average pension of €111,000.
This gap highlights the importance of employer-provided pension schemes. Offering a robust occupational pension scheme can:
But why is the average pension not sufficient for your employees?
According to Numbeo [2], Ireland is the 20th most expensive country to live in, making it essential to have a substantial pension pot.
Now, one of the crucial factors affecting your employee’s pension pot is inflation.
Ireland’s core inflation rate (which excludes volatile food and energy costs) was 5.3% in January 2024 [3], mainly due to higher mortgage interest rates and transport costs.
Some experts predict that prices will continue to rise slowly in most sectors — even though the general inflation rate seems to be falling [4].
For instance, did you know Diageo announced a 6-cent hike in the price of its pints (their third hike in 18 months)? [5] This is after a 12-cent hike in February 2023!
Bottom line: At the current average pension rate, most individuals won’t be able to afford a basic standard of living post-retirement in Ireland.
That’s why ALONE (a national charity) has asked the government to implement benchmarking for the State Pension, as per the commitment made in the Roadmap to Social Inclusion 2020-2025 policy [6].
But how many people rely on the State Pension?
Let's take a look.
A 2024 Pension Coverage survey [7] conducted by Ireland’s Central Statistics Office (CSO) observed that:
A "good pension pot" is subjective — the retirement pension may differ based on your employees' salary, retirement goals, and circumstances.
Financial advisors typically recommend aiming for 50% of an employee’s gross pre-retirement income [8] as a pension. So, if they earned €75,000 per annum before retirement, they’ll need an annual income of at least €37,500 in retirement.
Let’s look at rough estimates of what your employees should aim to accumulate in their pension pot throughout their careers.
Note: We calculated these estimates using Ireland’s average wage for full-time workers, which is around €44,202 (pre-tax) per year, according to a 2024 survey by Morgan McKinley [9].
Since these estimates are based on Ireland’s average wage, they may not resonate with your employees’ current salary. This information should be treated only as a guideline, not as financial advice. Please consult certified financial planning experts for accurate pension advice based on the personal situation of your team members.
Is your employees’ pension pot smaller than they had expected?
Let’s find out why.
Some factors that affect pension entitlements are as follows:
Your employees’ pension entitlement may differ based on the scheme they have opted for.
For example, at retirement, some schemes provide a fixed pension amount based on your employee’s salary and other conditions, whereas the returns of some schemes depend on investment performance.
Three types of pension schemes are available to Irish citizens:
The more your employees put into their pension pot, the better entitlements they get.
Ask them to consider increasing their pension contribution levels if you also contribute to their pension. As an employer you can match their contributions (up to a specific limit), resulting in a larger pension pot at retirement.
A higher income level will allow your employees to make larger contributions toward their pension pot. Being the employer, you should consider how an increase or decrease in the employee's salary may impact their pension pot.
An employee’s gender can also affect their pension pot upon retirement.
According to the 2024 Gender Pension Gap Report from Irish Life, the gender pension gap in Ireland between men and women is 36%.
This pension gap mainly arises because women often work part-time, take career breaks, earn less during their working lives, and face high childcare costs.
As a result, they contribute less to their pensions and have smaller savings.
To help reduce this pension gap, the Irish government launched the "Long-term Carers Contribution" scheme in January 2024. This scheme lets people who have been full-time carers for at least 20 years (1,040 weeks) qualify for the State Pension (Contributory).
Inflation can cause an employee’s pension pot to lose its value over time.
As goods and services get more expensive, the purchasing power of your employee’s pension pot reduces. Sound investment decisions and professional financial advice can help to prevent these losses.
Ireland's average life expectancy rate as of 2025 is 83 years.
How does that affect pensions?
Your employees may need a larger pension pot to sustain themselves after retirement.
For instance, if they retire at 66 and live until 83 (average life expectancy in Ireland), their retirement fund should last 17 years.
Learn about the Retirement Age in Ireland.
Due to rising life expectancy rates, the Irish government increased the State Pension age from 65 to 66 in 2014. Although it was expected to rise to 67 in 2021 and then to 68 by 2028, no provisions for change have been made as of January 2025.
Let’s look at Ireland’s three pension types to understand when your employees can claim their pension income:
Want to increase your employee’s retirement savings?
Here’s how you can help them do that:
Here are the answers to some commonly asked questions on Irish average pensions.
The fees pension providers may charge to manage employee investments typically consist of the following:
Note: The charges for the Auto Enrolment Scheme are expected to be confirmed closer to its launch date of 30 September 2025. It’s expected to include:
Under the PAYE (Pay As You Earn) system, all occupational pensions and social welfare payments from the Department of Social Protection are subject to taxation.
However, employees don’t have to pay USC (Universal Social Charge) and social insurance (PRSI contributions) on social welfare payments.
If your employee is above 66, they’re liable to income tax on their annual retirement income.
The first part of their income is taxed at 20% based on the standard rate cut-off points, and the remaining income is taxed at a higher tax rate of 40%.
When employees retire, they can claim a portion of their pension as a tax-free lump sum (up to a specific limit), subject to certain conditions.
But does everyone have to pay taxes?
In certain circumstances, such as if your employee is 65 or older and earns below a specific income level, they may be eligible for a total income tax exemption.
This income level is called the exemption limit.
Additionally, for couples with dependent children, this exemption limit increases with each child.
Learn more about Tax Relief on Pension Contributions in Ireland.
If your employees don’t have a workplace or private pension pot to support themselves in retirement, they can avail of the State Pension.
As of 2025, the maximum weekly rate of the State Pension (Contributory) is €289.30 (€15,043.60 per annum).
If they don't qualify for the contributory pension, they can avail of the State Pension (Non-Contributory). It’s paid at a weekly pension rate of €278 per week if the employee is under 80 years of age and at a rate of €288 per week if they’re 80 and above.
In Ireland, 53% of workers [7] don’t have access to an occupational pension because their employers don’t offer one.
As a result, most Irish employees become dependent on the State Pension, which isn’t sufficient to sustain them during retirement.
Want to offer affordable and flexible pension plans for your employee’s welfare?
Try Kota.
Kota is a digital employee benefits app that allows employers to manage, pay, and scale your pension benefits globally from a single centralised platform.
With Kota, you can:
Join Kota today and empower your people with our all-in-one digital pension app.
Sources:
1. Pension Support Line IE - What is the average pension in Ireland?
2. Numbeo - Cost of Living Index by Country 2024
3. Statista - Core inflation rate in Ireland 1983-2024.
4. Irish Examiner - Price inflation falls below 2% as interest rates take their toll - 2024
5. Irish Examiner - Diageo to raise price of a pint by 6c in third hike in 18 months - 2024
6. Alone - ALONE Calls for the state pension and other social welfare payments to be benchmarked.
7. Central Statistics Office - Pension Coverage - 2024
8. Irish Examiner - You can retire well on 50% of your gross income - 2022
9. Morgan McKinley - 2024 Salary Guide Ireland
10. Fidelity - How much do I need to retire - 2024
Trevor Gardiner QFA, RPA, APA in Insurance. With 23 years of experience in Financial Services, I have a strong passion for Health Insurance and Pensions.
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