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Retirement planning is important for everyone, but women face unique financial challenges that make it even more crucial to take a strategic approach. Research shows that women in Ireland would need to work eight years longer than men to accumulate the same pension savings.
Factors like lower lifetime earnings, career breaks for caregiving, and a longer life expectancy contribute to this gap, leaving many women at risk of financial insecurity in retirement.
Understanding these challenges and taking proactive steps can help women build a more secure future. In this blog, we’ll explore why women need to plan differently for retirement and how they can take control of their financial future.
Why Retirement Planning Is Different for Women
Longer Life Expectancy Means More Savings Are Needed
With an average life expectancy of 85 years, women in Ireland are likely to spend two decades or more in retirement. While a longer life is something to celebrate, it also brings financial challenges—particularly when it comes to ensuring that savings last.
One of the biggest concerns is covering everyday living costs over a longer period. Essential expenses such as housing, utilities, and food remain, even after full-time work ends. Inflation further complicates matters, as the cost of goods and services continues to rise over time, eroding the value of savings. Women must account for these factors when planning for retirement, ensuring their savings can sustain their lifestyle in the long run.
Healthcare is another critical consideration when planning for retirement. As people age, medical expenses tend to rise, from routine check-ups and prescriptions to more complex treatments and potential long-term care needs.
While Ireland has a public healthcare system, many retirees opt for private health insurance to access faster treatment and a wider range of services. Having the right health insurance policy in place can help manage costs and provide peace of mind.
Career Breaks and Part-Time Work Impact Pension Savings
On average, women spend six years less in the workforce than men, primarily due to maternity leave and caregiving responsibilities. Even after returning to work, many women opt for part-time roles, which can further limit their ability to contribute to a pension.
According to the 2024 Gender Pension Gap Report from Irish Life, these career interruptions and lower salaries contribute to a 36% gender pension gap, with women earning, on average, 22% less than men.
Since pension contributions are often based on earnings and years of service, time out of the workforce results in smaller pension pots, leaving women at a financial disadvantage in retirement.
Impact of Maternity Leave on Irish State Pension
In Ireland, your PRSI (Pay Related Social Insurance) contributions are protected during both paid and unpaid maternity leave to ensure your State Pension entitlements remain unaffected.
While receiving Maternity Benefit, you automatically receive credited PRSI contributions. For any additional unpaid maternity leave (up to 16 weeks), you can apply for PRSI credits upon returning to work.
These credited contributions help maintain your social insurance record, which is essential for qualifying for the Contributory State Pension. To verify your PRSI record, you can request a contribution statement from the Department of Social Protection.
Impact of Maternity Leave on Private Pension
Employer-Sponsored Pension Schemes (PRSA, Occupational Pension, or Executive Pension)
During Paid Maternity Leave (First 26 Weeks)
If you receive a Maternity Benefit and your employer tops up your salary, your pension contributions will usually continue as normal.
Some employers will continue making pension contributions on your behalf while you’re on maternity leave, but they are not legally required to do so.
You should check your employer’s pension policy to see if they contribute during this time.
During Unpaid Maternity Leave (Up to 16 Additional Weeks)
Since you are not receiving a salary, pension contributions usually stop, unless your employer has a policy to continue them.
You may have the option to make voluntary contributions to cover the gap if you want to keep your pension savings on track.
Personal Pensions (PRSAs, Personal Retirement Bonds, or Self-Employed Pensions)
If you contribute to a PRSA or personal pension plan (self-employed), you are responsible for payments. Since maternity leave may mean reduced or no income, you might need to pause or reduce contributions during this time.
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Lower Lifetime Earnings Affect Retirement Income
On average, women in Ireland earn 22% less than men. Since pension contributions are based on earnings, a lower salary means lower pension savings over time. Even though women contribute the same percentage of their salary as men, the smaller earnings base significantly affects the final retirement pot.
The impact of lower lifetime earnings can significantly affect your long-term financial security, especially when you consider the power of compounding. Pension savings grow over time through investment returns, so a smaller initial balance means reduced growth potential. Women also tend to live longer than men, meaning their retirement savings must last longer.
Women Are Less Likely to Make Additional Voluntary Contributions (AVCs)
The same report shows that men are 60% more likely to make lump-sum AVCs and 12% more likely to contribute regularly.
AVCs (Additional Voluntary Contributions) can be a powerful way to boost your pension savings by allowing you to top up your retirement fund in a tax-efficient manner. However, many women don’t take full advantage of this opportunity, often due to lower disposable income or a lack of confidence in financial decision-making.
While men are more likely to make both one-off and regular AVC payments, you can take control of your financial future by starting small and increasing contributions over time. Even modest AVCs can help make up for gaps in your pension, especially if you’ve taken time off for maternity leave or caregiving.
By exploring your AVC options, understanding the tax benefits, and setting up regular contributions, you can strengthen your retirement savings and secure greater financial independence.
How Women Can Take Control of Their Retirement Planning
Start Saving Early
The earlier you start contributing to a pension, the more time your money has to grow. Even small, consistent contributions in your 20s can create a strong foundation for retirement, while your 30s are a key time to maximise employer contributions and consider AVCs.
You can also benefit by starting where you are. Whether you’re in your 40s, 50s, or even 60s, there are still strategies to boost your pension savings, such as making AVCs, maximising tax relief, or adjusting your retirement goals to ensure financial security. The key is to take action now and make the most of the options available.
You can check our Retirement Planning Guide for more insights.
The ultimate Retirement Planning Guide.
Planning for retirement is a significant life milestone. Whether you’re just starting to think about retirement or are already well into your retirement journey, this guide aims to empower you to make informed decisions and create a retirement plan that aligns with your unique financial goals and expectations.
After you download your guide, one of our expert mortgage advisors will be in touch shortly to provide you with guidance and further relevant information including typical repayments, qualification amounts and mortgage requirements.
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Maximise Employer Contributions
If your employer offers pension contributions, ensure you’re getting the maximum match available. If possible, negotiate higher employer contributions, especially after returning from maternity leave or a career break.
Make Additional Voluntary Contributions (AVCs)
Consider making regular AVCs to boost your retirement fund, as even small additional contributions can have a significant impact over time. If you’ve taken a career break, catching up on contributions once you return to work can help bridge the gap in your pension savings.
Stay Engaged With Your Pension
Regularly reviewing your pension is essential to ensuring you stay on track for a secure retirement. Life circumstances change—whether it’s a salary increase, a career break, or changing financial priorities—so it’s important to adjust your contributions accordingly.
Checking your pension account helps you understand if you’re contributing enough, whether you should make Additional Voluntary Contributions (AVCs), and how your investments are performing.
It also ensures you’re taking advantage of employer contributions and tax reliefs available to you. Read our article When Was The Last Time You Reviewed Your Pension Funds? to learn more.
Seek Professional Financial Advice
You might feel uncertain or overwhelmed when it comes to retirement planning, but working with a financial advisor can provide clarity and confidence in your decisions. A professional can assess your current financial situation, help you set realistic retirement goals, and create a personalised strategy that aligns with your lifestyle and future needs.
They can also guide you on investment options, ensuring your pension savings are working efficiently for you, while advising on tax-saving strategies to maximise your retirement income.
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Retirement planning isn’t one-size-fits-all, and for women, it requires a proactive and tailored approach. By understanding the challenges and taking steps to boost savings, maximise contributions, and stay engaged with financial planning, women can build a secure and comfortable retirement.
We are also experts in personal and business protection, savings and investments, pension tracing, personal and business financial planning, mortgages, and wealth management and extraction.
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All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
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