We’ve known for a while that financial advice makes life easier.  

In 2017, fewer than one in three adults in Ireland said that they had a financial plan – but those that did were twice as likely to report having no financial worries[1]. And it’s not just worries of a financial nature that can be soothed, but even day-to-day stress. 

A 2023 study[2] in the US even suggested that accessible financial advice programs are needed as a matter of public health, with finance having a significant impact on peoples’ psychological and mental well-being. 

The same is true on this side of the Atlantic. Irish people who have sought financial advice are significantly better-positioned[1] for the future than those who have not. 

	Financial Advice Seekers	Others
Average Savings/Investments	€71,332	€44,754
Average Pension	€130,525	€84,230

Source: Brokers Ireland – Value of Advice

Not only do people who have received financial advice end up with higher savings, investments, and pension funds, they’re generally less anxious about the future[3]. In a paper titled The True Value of Advice, pretty much every person who received financial advice was happy about it. Of the people surveyed who had received financial advice: 

• 91% agreed advice had helped them achieve financial goals, 
• 86% agreed advice had helped them achieve personal goals, 
• 90% have greater confidence in making financial decisions, 
• 95% have greater peace of mind. 

The myth of “I don’t need financial advice” in Ireland 

Many people don’t believe that financial advice is for them.  

There is a general thought that you need to be wealthy to benefit from financial advice. In a 2020 paper, 61% of survey respondents said that they did not think they had enough assets to need advice[3].  

“Some people think you need to have a lot of money to meet with a financial advisor,” says Irish Life financial advisor Ronan O’Halloran. “This isn’t the case at all. We can help clients in a huge range of scenarios.  

“It could be helping somebody start to save towards their first mortgage or someone looking for the most appropriate solution for their retirement income. We’re here to help in all situations.“ 

In the end, 88% of people who received financial advice – regardless of their net worth – reported that it freed them from financial worries and stress[3]. 

Financial advice at any age: it’s for everyone 

While 38% of adults in Ireland have sought financial advice[1], there’s a significant age gap in the figures.  

More than half of retired adults have at some stage received financial advice, while just 36% of the working population can say the same[1]. But the younger you start taking steps towards improving your financial future, the better. 

“A lot of people know about the benefits of income tax relief on your pension contributions,” Ronan observes. “But not many think about the tax-free growth within a pension fund. The idea of compounding growth can have an enormous effect on your long-term savings in a pension.”

Of course, with any investment there is no guarantee of growth (and indeed there is risk of losing money). However, with a pension not only can you receive income tax relief on your contributions, but when those contributions are invested and (hopefully!) grow, the extra funds are reinvested and (hopefully!) grow in turn.

This compounds any growth over time without being subject to Capital Gains Tax like a regular investment – although remember that in retirement, your pension fund will be subject to income tax and other levies.

Financial planning in your 20s 

If you’re in your 20s and already thinking about your financial future, then congratulations: you’re setting yourself up for success.  

The Irish Life 2017 Pension Report found that the average age at which Irish adults started a pension was 37, and they contributed around 11% of their earnings. 

Now, 28 years before retirement seems like a long time to save, but the report also found that starting a pension 10 years earlier could lead to between 50% and 120% more retirement income[4].  

Financial planning in your 30s 

Your 30s can be an interesting time for personal finance.  

In many cases, this is the decade in which people will be getting married, buying their first home, and having children. That’s not exactly a list of “cheap life events” there!  

It’s around this time that people might first start thinking about Life Insurance. Not just Mortgage Protection Insurance, which is a legal requirement for drawing down a mortgage, but other kinds of protection for your family: Specified Illness Cover, Income Protection, and more.  

“When we think about assets we think about things like savings, investments, our homes, maybe an investment property,” Ronan says. “The reality is that your ability to go out and earn an income is your biggest asset.” 

If something happens to you – a serious injury or worse – that prevents you being able to work, what impact does that have on your life and the lives of your family? Protecting your income should be the foundation of any financial plan. 

Financial planning in your 40s 

Paying off debts isn’t specific to this age, but people in their 40s do on average have the highest amount of debt[5]. 

If you have multiple debts, then employing the “avalanche method” to pay them off will generally result in paying less interest over the long run. This involves paying off your highest-interest debt first while keeping up the minimum repayments on your other debts. 

Once the highest-interest debt is paid, use that extra money to overpay on the next-highest debt, and continue this until you are debt-free. 

Financial planning in your 50s 

Over a quarter of people aged 55 and over have no savings in place for their retirement[6].  

If you’re one of them, or if you’re worried about your financial security after you stop working, it’s by no means too late to do something about it.  

“Break finances down into short term, medium term, and long term,” Ronan advises. “As you approach retirement, you’d hope that your short-term needs are taken care of; hopefully mortgages and loans are close to the end, you have built up some savings, and if you have children maybe they’re close to financial independence. 

“Now’s the time to really focus on what is your picture for retirement. What do you see yourself doing? What will it cost? What steps can you make now to help you achieve that picture of your retirement?” 

If you are at the point of having mortgages and loans paid off, and your children are flying the nest, it could be a good idea to redirect some of that surplus money into your retirement fund – it's your last chance to really build up that pension and take advantage of up to 40% income tax relief! 

Financial planning in retirement 

If you’ve done everything correctly and have been lucky enough to comfortably retire with a pension that works for you, congratulations. You get to put your feet up – mostly.  

With life expectancy on the rise, the time that people spend in retirement is increasing. If you’re lucky, you’ll have several decades of retirement ahead of you. It’s important to stay on top of your finances during this period, as your financial needs are likely to change over retirement.  

“Most of us hope to be active in our early years of retirement,” says Ronan. “We may need more access and flexibility with our retirement income in these early stages. That means our financial plans will need to stay flexible. 

“As we get older, we may need to consider how our income needs change. This is why it’s so important to have an advisor you trust who can work with your changing needs.” 

Free financial advice for everyone in Ireland 

When you have a call with one of Irish Life’s advisors, there is no fee or obligation. The session is completely free. 

The advisor will talk through your financial situation and needs over the course of a 45-60 minute phone or video call, and then you can take the information and advice away to consider. 

Book your free financial advice call today and take the next step towards improving your financial future – no matter your age, net worth, or income. 

Sources

[1] Brokers Ireland – Value of Advice | retrieved 18 December, 2023

[2] Ryu & Fan – The Relationship Between Financial Worries and Psychological Distress Among U.S. Adults | retrieved 18 December, 2023

[3] IOOF – The True Value of Advice | retrieved 18 December, 2023

[4] Irish Life – Pension Report | retrieved 18 December, 2023

[5] Debt Advice Foundation | retrieved 18 December, 2023

[6] Central Statistics Office – Pension Coverage 2022 | retrieved 18 December, 2023