Time to grab bull by the horns? Your 2018 top investment guide

Roads, bridges, gold, and European banks could make money for investors this year, but the jury is out on commercial property, writes Louise McBride

Investors have plenty of reasons to be cheerful as we head into the first few weeks of the new year. The global economy is strong and expected to continue growing in 2018. The US tax cuts approved just before Christmas could push up the profits - and in turn, the share price - of many US companies.

There are, however, a few headwinds. Not everyone will benefit from the tax cuts in the US. Uncertainties around Brexit and oil prices still weigh on investors' minds. Stock market valuations are at their highest level since 1900, according to investment giant Goldman Sachs.

A valuation is a measure of the value or worth of a company. When valuations are high, it is expensive to buy shares and pricey shares can be risky. "When you buy something very expensive, you are very exposed if anything goes wrong," said David Flynn, chief investment strategist with Baggot Investment Partners.

The current bull market is one of the longest on record. Goldman Sachs recently warned that there would "eventually" be a bear market (where stock markets start to fall and drop at least 20pc from their peak). "We think the bull market will continue into 2018," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments (ASI). "We see a few headwinds in 2018 but we don't see the conditions falling into place for a bear market. We don't think equity markets will give as strong returns as they did in 2017 though."

Davy agrees. "We think markets can move higher [this year]," said Brian O'Reilly, head of global investment strategy at Davy Private Clients. "Return expectations are lower for 2018 than 2017 though -because of the high valuations across equities and bonds."

So with this mixed bag of finances, which investments could make money this year?

European shares

European bank shares could do well this year, as might the shares of cyclical companies exposed to the economic momentum in Europe - if the European economy continues to recover, according to O'Reilly. (Cyclical companies are firms which typically do well in economic upturns.)

"We are seeing stabilisation and improvement in Europe's economy," said O'Reilly. "We are seeing more signs of life in the economies of Germany, France and Italy. That's really positive. The European banking sector has lagged considerably over the last few years. With the recovery, the [European] banks are likely to lend more - and so their profits should go up. Shares in the Eurostoxx 300 index are specifically tipped by O'Reilly. "European valuations are not cheap - but they're cheaper than the US," said O'Reilly.

US shares

Many US shares are expensive due to high stock market valuations. It could still be possible to make money on US shares this year however. The US stock market may be lifted by the tax cuts being pushed through by its president, Donald Trump, this year. "Tax cuts will be positive for US markets and world markets - the US consumer is the main driver of global growth," said O'Reilly.

However, some firms will not benefit as much as others. Tech companies, for example, may lose out as many are already paying tax at relatively low rates. "The more domestically-focused companies in the US will be the main beneficiaries of any growth in US markets," said O'Reilly.

Trump also wants to reduce banking sector regulation, which could give US bank shares a lift.

Although politics can have an impact on stock markets, it is company profits which investors should ultimately be concerned about, according to Milligan. "A lot of people get concerned about politics - whether that's Brexit or Trump - but at the end of the day, the world economy is picking up and a lot of companies are making decent profits," said Milligan. "So investors should follow the profits - and find a fund manager that's able to invest in companies that are delivering profits."

ASI believes that although equity markets are expensive, better corporate profits can drive positive returns on stock markets this year.

Building optimism

Trump is expected to push through an infrastructure bill this year - following the vows he made during his election campaign to "transform America's crumbling infrastructure". Should that bill be passed, the shares of big material, industrial and equipment firms which will have exposure to, or involvement in, US infrastructure projects, could do well.

Recent calls for more investment in European infrastructure could also see more spending on the construction of roads, toll roads, bridges, ports and airports across Europe in the coming years. "We are seeing governments starting to increase their infrastructure spending," said O'Reilly "So infrastructure funds could do well this year - as could the shares of CRH - and any companies exposed to big government contracts to build roads, schools and transport."

Gold

One of the biggest investment opportunities this year is in gold and gold mining stocks, according to Flynn. "I expect gold and gold mining companies to experience a staggering bull market over the next few years," said Flynn

Shares in gold mining companies are trading at "historically cheap levels", according to Flynn. "We have recently seen the heaviest insider buying in gold than we have seen since late 2015 and early 2016 - when gold prices bottomed."

Flynn expects there to a rush of investors into gold eventually - which would in turn push gold prices up. "The catalyst [for that rush] is likely to be stock market turmoil of some kind - probably driven by debt, which creates a lot of volatility and causes a wave of selling in big cap equities, corporate bonds, and potentially other types of bonds as well." Some of the gold stocks recommended by Flynn include New Gold, Yamana Gold, Goldcorp and Centerra Gold

Offices and shops

Irish commercial property is a bit of a wildcard. Davy expects it to continue to do well this year - in particular Irish and European commercial property which pay income yields in excess of 4.5pc. However, ASI is more guarded about Irish commercial property. "Irish property has been on a remarkable run in recent years and the prognosis from here is that performance will be healthy in the medium-term - although the impact of Brexit is hard to determine and has added a level of uncertainty for investors," said Craig Wright, real estate and strategy analyst with ASI. The tripling of stamp duty on Irish commercial property in the Budget could go against investors, according to ASI. "Recently introduced upward and downward rental reviews means the latter can be imposed for the first time - with the potential to damage future rental flows," said ASI in a recent note. "Supply is expected to increase fairly significantly in the next couple of years."

ASI believes parts of Europe - like offices in the central business districts of Amsterdam and Madrid - could do well. But high street shopping centre investors could be vulnerable. "Online shopping is causing difficulties for high street shopping malls," said Milligan.

We've learnt a lot of hard lessons about property in recent years. Tread carefully.

Net mortgage lending on rise for first time since bailout

The net level of mortgage lending in the Irish economy has increased for the first time in seven years, according to new figures released by the Central Bank.

The latest money and banking statistics report shows that net mortgage lending rose by €169m or 0.2pc in the year to the end of November. While the figure is relatively small within the context of Ireland's overall mortgage market, it will be seen as both a sign of the economic recovery which has taken place since the bailout by the EU/IMF/ECB troika in 2010, and as an indicator of the more recent uptick in the country's housing market.

Up to now, the level of mortgage repayments has consistently outstripped new mortgage lending as the number of existing borrowers seeking to pay down their home loans far outweighed those entering into home ownership. According to the figures released by the Central Bank yesterday, mortgage loans, which account for 83pc of total on-balance sheet loans, increased by €105m in November alone.

While the figures for November show the level of new mortgage drawdowns is once again surpassing the level of existing loan repayments, the resurgence in the mortgage market had already been confirmed by an earlier report from the Banking and Payments Federation (BPFI).

Released last November, the BPFI figures showed that in the first 10 months of 2017, some 34,600 potential borrowers received mortgage approval - an increase of 27pc on the same period in 2016.

While not all of those being approved for a mortgage end up buying, figures from specialist bank Investec show that the number of mortgage approvals is close to the eventual number of home loan drawdowns.

Elsewhere in its report, the Central Bank said yesterday that household deposits increased by €2.6bn over 2017 to stand at just over €100bn for the third consecutive month at the end of November.

Deposits from households decreased in net terms by €548m in the month, reflecting what it termed "a seasonal trend of declines in the month of November that has been seen in recent years".

Where house price growth is highest and lowest as the average deposit for Dublin home tops €50k

The average first-time buyer had an income of €77,000 and a deposit of €52,800 saved up before buying a home in the capital during 2017.

Dublin home-buyers have been faced with taking on "higher levels of mortgage debt" despite strict Central Bank lending rules designed to cool the market.

House prices are expected to continue to rise in 2018 but at a slightly slower pace due to a tightening of the lending rules, according to the latest house price report from MyHome.ie.

The report, which is published in association with Davy, predicts house prices will rise by 8pc overall in 2018, split between double-digit growth outside the capital and a rise of 6pc or 7pc in Dublin.

The median asking price for new sales nationally was €242,000 in the final quarter of 2017. In Dublin, the median price was €330,000 (up 6.2pc), and €195,000 (up 6.3pc) in the rest of Ireland.

The report notes that the Central Bank of Ireland has tightened its mortgage lending rules for 2018, which will affect trader-uppers.

NEWS-Daft-house-price-Jan-2018.png

First-time buyers (FTB) and second and subsequent buyers (SSB) mortgages are capped at 3.5 times income, known as the loan-to-income (LTI) limit.Up to last year, banks or other credit institutions could issue loans with up to 20pc of the combined value of FTB and SSB mortgages allowed above the 3.5 LTI ratio.

Under the revised measures, the proportion of mortgages allowed above the cap is split into separate FTB and SSB categories.

As of yesterday, 20pc of the value of new mortgage lending to FTBs can be above the LTI cap, but only 10pc of the value of new mortgage lending to SSBs can be above the LTI cap.

Conall Mac Coille, chief economist at Davy, said the tighter Central Bank rules will serve to slow house price inflation in Dublin.

"Asking prices have fallen in the final quarter of each of the last five years before bouncing back in the spring and we see that pattern continuing in 2018.

"However, due to the Central Bank tightening its mortgage lending rules we believe house price inflation in more expensive areas, like Dublin, will slow somewhat to around 6pc or 7pc," he said.

"Homebuyers in Dublin have been taking out higher levels of mortgage debt, but with the availability of credit constrained, further price increases will also be curtailed slightly in 2018.

"However, double-digit price gains are likely to continue outside the capital where the recovery began later, prices are cheaper and there is still scope for leverage on mortgage lending to rise."

Turning to the average income and deposit required to buy a home, Mr Mac Coille said: "The median first-time-buyer in Dublin during the summer had an income of €77,000, a deposit of €52,800 and purchased a home worth €321,000.

"This meant in Dublin the median house price-to-income ratio for first-time buyers was 4.2 [times income]. However, prices are less stretched in other areas of the country.

"The median first-time-buyer in Leinster had an income of €56,000, deposit of €22,000 but purchased a house worth €179,000 - implying a house price-to-income ratio of just 3.2 [times income]."

He also noted that there was a positive side to rising house prices, in the reduction of people trapped in negative equity.

"Many Irish households have been unwilling to move home due to their stretched finances, specifically their lack of housing equity," said Mr Mac Coille.

Managing director of MyHome.ie Angela Keegan added that housing market transactions overall grew by 10pc in 2017 which also was a positive development.

"While the increase in transactions - it should come in around 55,000 for 2017 - is welcome the overall picture is that of an illiquid market hindered by the lack of fresh housing supply. If the Irish market was functioning properly we would be seeing around 90,000 transactions per year."

The average time to 'sale agreed' was just 3.8 months nationally and 2.8 months in Dublin.

"These figure show that whatever stock is for sale is sold ever more quickly," added Ms Keegan.

MyHome uses the median price or the 'middle price' as an average for its calculations.

Central Bank is accused of holding back credit unions

The Central Bank and the Government have been accused of holding back the development of credit unions.

False claims that the sector would end up needing a €1bn bailout were used during the worst of the downturn to clamp down on the lenders, members of the Oireachtas Finance Committee said.

Committee chairman John McGuinness said the member-owned lenders were being restricted, which was one of the key reasons they were not growing fast enough.

The committee has recommended in a report that smaller credit unions should not be subject to the same stringent regulation as ones with multi-million euros in assets or savings.

It has also recommended that credit unions be allowed to lend more of their money for the likes of mortgages, and should be allowed to invest in social housing.

There are currently restrictions on the level of long-term lending.

For most credit unions, just 10pc of the loan book of a credit union can be lent out for more than 10 years, severely restricting the amount of mortgage lending they can do.

The TDs and senators said this strict rule should be relaxed.

The committee also wants the Central Bank to move to tiered regulation, which would mean tougher rules for larger lenders.

But as part of this, the bigger ones would also be able to introduce services that smaller, and less sophisticated, credit unions would not be allowed to offer.

"The credit union sector should be allowed to grow, and should not be regulated out of business," Mr McGuinness said

He said statements by former finance minister Michael Noonan in the Seanad in 2011 that the credit unions would need a €1bn bailout from taxpayers proved far off the mark. But this was used by regulators and policy makers to hold back the development of credit unions.

"I feel the credit union movement is often restricted in what it can do," added Mr McGuinness

The committee said it was concerned that lending was at such low levels at the State's credit unions. Only a quarter of the assets of credit unions are loaned out and the figure should be nearer half.

At the moment there are fewer than 300 credit unions, and they are subject to one-size-fits-all regulation, whether they have €20m in assets or €400m.

Mr McGuinness said the low level of lending was despite the fact that on the surface the sector appeared robust.

Sector assets have increased by €2bn between 2011 and 2016 from €14bn to €16bn.

The committee said the ability of credit unions to withstand additional financial stress was strong, despite the High Court-ordered wind-down of Charleville last month. The committee said the sector had about €880m of surplus capital.

Both the Irish League of Credit Unions, and the other representative body, the Credit Union Development Association, welcomed the report.

Cashed-up Aviva eyes further deals following Friends First buy

Aviva expects to generate an extra £3bn (€3.4bn) in cash over the next two years and will make acquisitions as well as giving money back to shareholders, it said yesterday, sending its share price to three-month highs.

In November Aviva's Irish arm agreed a deal to buy Friends First Life Assurance for €130m in cash, in a move that boosts the insurer's cross selling capacity - the ability to market multiple insurance and investment products to the same customers.

The past year has seen insurers and reinsurers, among them Allianz and Swiss Re, forced to return cash to shareholders as strong competition cuts opportunities for expansion.

While it is in expansion mode here, Aviva has made a number of disposals in the past year, including in France, Spain, Italy and Taiwan, and says its Indian joint venture is under "strategic review". "The franchises we have left have a pretty decent track record," CEO Mark Wilson told an investor day in Warsaw.

"We are moving into a new phase and we have the capital to be able to do it."

Aviva expects to deploy £2bn of cash in 2018, including £900m to repay expensive debt and the rest to fund more "bolt-on" acquisitions and returning cash, it said in a statement ahead of the investor day.

Some analysts had anticipated Aviva would announce a large scale share buyback, but Mark Wilson said the firm had an "appetite for M&A".

Aviva has said it is only looking at "small purchases" following its £5.6bn. It also has an eye on technology acquisitions - including expanding in so called "insurtech" and artificial intelligence.

Morgan Stanley analyst Jon Hocking reiterated his 'overweight' rating on the stock in a note to clients. "Taken as a package, we think this is a bullish set of goals from Aviva and, if achieved, the current multiple on the shares looks too low," he said, giving the shares a 649p price target.

Aviva lifted expectations for earnings growth to more than 5pc annually from 2019 onwards, from a previous target of mid-single-digit growth.

Mortgage price war set to encourage more homeowners to switch lenders

The mortgage price war among banks on interest rates is set to prompt more people to switch as they realise they are being overcharged.

More houses are out of negative equity, which will also encourage more people to move mortgage provider, according to brokers MyMortgages.ie.

The brokerage estimates that families could save between €40,000 and €100,000 over the life of the loan by moving to a better-value lender.

Joey Sheahan of MyMorgtages.ie said he expects a surge in mortgage switching in the next year as banks rump up the interest-rate price war, and more households will move into positive equity.

"With the still curtailed new house building, banks are struggling to hit their mortgage targets and so are turning to the switching market. This is creating an opportunity for many homeowners to make considerably savings," Mr Sheahan said.

He said many people assume that once they have taken out a mortgage with a lender for 20 or 30 years, then that’s the end of the decision-making process.

But mortgages are just like any other financial product – they should be reviewed every three years to ensure you are not paying over the odds, he said.

Mr Sheahan said he has no sympathy for some borrowers who complain that they are paying high rates.

"There are lots of homeowners needlessly paying more than 3.6pc in interest, but a large portion of these people can easily switch lender once they have 10pc equity in their property.

"There are less and less people in negative equity due to the unprecedented recovery in property values over the past few years."

Recent research commissioned by the Competition and Consumer Protection Commission, the State agency that promotes consumer interests, found that small numbers switch mortgages.

Just one in seven mortgage holders have thought about switching, or actively engaged with their lender in the last five years.

And despite the savings that can be made, only 2pc of mortgage holders actually switched provider in the last half decade.

Mr Sheahan said large numbers of people are struggling financially under the weight of these rates. “We deal with clients on a daily basis who are unaware that switching could even be an option for them – many believe they are simply ‘locked in’ to the contract with their current lender.

"And of those who have heard of switching, most just think it’s ‘too much hassle’."

He said consumers do not realise that most banks will give cashback which will more than cover this from €1,500 up to 2pc of the loan amount.

Savings of close to €300 a month can be made by moving from a mortgage provider charging 4.20pc for a mortgage to one with a rate of 2.75pc, on a €350,000 mortgage.

Research from the Central Bank in 2015 showed that one in five mortgage holders could make savings by switching their mortgage.

Compensation to be paid 'by Christmas' for tracker victims

BANKS at the centre of the tracker mortgage scandal will begin paying compensation to their victims by Christmas, the Government believes.

Representatives from Bank of Ireland, Permanent TSB and KBC Bank will meet with Finance Minister Paschal Donohoe today in what Government sources are building up as a “showdown”.

Over the course of the week, CEOs of eight other institutions that overcharged customers will be hauled in for meetings, including Ulster Bank tomorrow and AIB on Wednesday.

Sources told the Irish Independent the vast majority were expected to agree to a demand to begin compensating customers before the end of the year.

However, it is understood one bank is showing resistance to the Government’s intervention.

“There seems to be movement with all of them except one but we’ll see what the meetings bring. If they don’t co-operate, then we will insist on enforcement action immediately,” said a source familiar with the process.

The source pointed to the case of Springboard Mortgages which was last year fined €4.5m for overcharging customers for their tracker mortgages.

The lender agreed to pay the penalty, which had been imposed for breaches under the Central Bank’s consumer protection codes.

“The reality is enforcement isn’t about the fine. It’s about reputational damage for the bank,” a source said.

At least 20,000 customers are believed to have been wrongly denied a tracker mortgage in that they paid thousands of euro more in interest than they should have.

Fianna Fáil has estimated the ultimate cost of redress and compensation could amount to €500m.

Ahead of Mr Donohoe’s meeting, Junior Finance Minister Michael D’Arcy has offered the lending institutions “some friendly advice”, saying they need to fix the situation or they will be heavily affected by Government action.

He said “the well is empty” in terms of patience with the banks, and all options are on the table.

Mr Donohoe will brief the Cabinet on his discussions when ministers meet this evening. The meeting has been brought forward from tomorrow because Taoiseach Leo Varadkar is travelling to France to meet with President Emmanuel Macron.

Mr Varadkar said “less than half of people have been compensated”.

“That’s not good enough. We’d expect compensation to be under way at the very least by the end of the year.

“We’re very frustrated with the lack of progress to date. We’re certainly not ruling out further regulations, further sanctions or additional taxation of the banks.”

However, speaking at Fine Gael’s presidential dinner over the weekend, he refused to criticise Central Bank Governor Philip Lane for his performance at an Oireachtas committee last week.

Prof Lane said the Central Bank was asking banks to write to people they refuse to give trackers back to, and told victims they can either go to the courts or ombudsman. This is despite the fact the Central Bank has warned there will be “substantial” numbers in addition to the 20,000 tracker-denial cases already disclosed.

Asked whether Prof Lane’s statements failed to meet expectations, Mr Varadkar said he would “rather see the pressure and focus being put on the banks over the next week or so”.

But Environment Minister Denis Naughten last night told the Irish Independent that the Central Bank “must review its own handling of this entire issue from start to finish”.

He expects the banks’ CEOs to bring a “concrete timetable for the restoration, redress and compensation plans for customers”.

“These customers have been unfairly and unscrupulously targeted by financial institutions and, as a result, have exposed an underlying culture which clearly still exists within the financial services sector,” he said.

Donohoe admits pension hit to women is 'bonkers'

Finance Minister Paschal Donohoe has admitted it is "bonkers and unbelievable" that women are losing out on pension payments due to a recent change in the rules.

Thousands of women are getting smaller pensions because they left the workforce before 1994 to care for children.

Others are taking a pensions hit because they once had a summer job or worked part time for a while.

It is estimated that 23,000 females have been hit with lower payments due to changes to State pension eligibility rules in 2012.

Wrong

Changes made by then social protection minister Joan Burton in the previous government make it more difficult to qualify for a full pension.

Retired women are losing more than €1,500 a year on average, according to calculations by advocacy group Age Action.

The rule change also means that the women affected will not get the full €5 increase in the State pension announced in the Budget and due from the end of March.

Mr Donohoe admitted it was wrong that women were being affected in this way.

He was reacting to a caller to the 'Today with Sean O'Rourke' show, whose wife is losing money due to the change.

Eamon Tynan, a pensioner from Co Longford, said the situation was costing her €35 a week in her pension payments.

His wife had a summer job in the 1960s when she was a secondary school student before joining the civil service.

As a result, "her contributions are now averaged out and divided by 50", he said.

The problem was a "huge issue for women retiring around now in their 60s", Mr Tynan said.

The minister responded that it was "bonkers and unbelievable" that women who worked and obeyed the law by paying pension contributions were now getting lower pensions.

"I think it is wrong the way they were treated. It was wrong then and it is wrong now," he said.

Mr Donohoe said: "It just seems incredible that we live in a country that required women to leave their jobs and what we are living with now is the consequences of that.

"The advice I have available to me is that if we were to look to try to rectify this issue in one move in a single Budget, it would cost hundreds of millions of euro for me to do," he added.

"Over the next few years, we are going to try to move to a pension system, which takes into account the entirety of people's contributions. We're aiming to do that for around 2021." The Department of Social Protection said it estimated it would cost €60m next year to revert to the previous system. In 2012, the then government changed the eligibility criteria for the contributory State pension.

It moved to an "averaging rule" to calculate the number of contributions made by a worker.

Those entitled to a full pension were unaffected, but large numbers of those who would have been in line for smaller pensions lost out.

Suffering

Under the old system, if you had an average of 20 contributions a year, you would be entitled to full State pension.

But the changes introduced in 2012 meant someone with 20 contributions a year got €35 less a week in pension.

Justin Moran, of Age Action, said that the failure to respond to the plight of tens of thousands of pensioners suffering because of the 2012 cuts was one of the biggest disappointments in the Budget.

"These changes have punished pensioners who took time out of the workforce to raise children and to care for their loved ones. Many have lost more than a €1,000 a year because of this.

"It's also important to remember that not every pensioner is going to get the €5 announced on Tuesday."

National Women's Council director Orla O'Connor said she was disappointed the issue was not addressed in this week's Budget.

Charlie Weston: Ten things women need to know about pensions Females will have 38pc less than men to live on at retirement

Women get a raw deal on pensions. Fewer of them work outside the home, and they often get paid less when they do take up paid employment. Many work only part-time.

All this means that the gender pay gap feeds into the pension issue. So when they get to retire they typically have a third less to live on than men.

A pensions gap of 38pc exists, according to the Irish Human Rights and Equality Commission.

But there are ways women can make the best of a bad situation by ensuring they maximise the value from the State pension, and any supplementary scheme, whether they are in the workforce or not.

Here are 10 things women need to know about pensions.

1 The State Pension

The State contributory pension is regarded as relatively generous. For those who have 48 annual PRSI contributions, the weekly payment is €238.30. This is the payment for people who qualified for pensions before September 2012. You get it from the age of 66. The means-tested State pension non-contributory is a payment for people aged over 66 who do not qualify for a State contributory pension or who qualify for only a reduced contributory pension based on their insurance record.

2 But women often get less than men

Women are losing large amounts of money from their retirement payments due to austerity cuts. A recent report from Age Action estimated that 23,000 females have been hit with lower payments due to changes to State pension eligibility rules in 2012.

Changes made by the previous government make it more difficult to qualify for a full pension. On average, retired workers have lost more than €1,500 a year, with women suffering the biggest hit, according to Age Action.

In 2012, the then-government changed the eligibility criteria for the contributory State pension. It moved to an "averaging rule" to calculate the number of contributions made by a worker.

Those entitled to a full pension were unaffected, but large numbers of those who would have been in line for smaller pensions lost out.

"Under the old system, if you had an average of 20 contributions a year, you would be entitled to €228.70. But after 2012, this dropped to €198.60, a cut of more than €30 each week," Age Action's Justin Moran said.

3 Homemaker scheme worth checking out

The homemaker scheme makes it easier for women who have spent time outside the workforce caring for children to qualify for the contributory State pension. The scheme protects your contributions by disregarding any years spent providing full-time care for a child under 12, or a disabled person over the age of 12.

Up to 20 years can be disregarded when the yearly average number of contributions for a contributory pension is being calculated, which can help you qualify for State pension, or a higher rate of pension. Typically, you won't have to apply for it. If you are already claiming child benefit, carer's allowance or carer's benefit, or a respite care grant, you will automatically be entitled to it.

4 Low pension coverage among women

Just a third of women own a pension, according to research. This means that two-thirds of women do not have a supplementary pension. This is despite the fact that women make up almost half of the workforce. Men are much more likely to have a pension. Part of the problem is that women are far less likely to discuss retirement planning with friends.

5 Most women don't know how to start a pension

A worrying 71pc of women don't know how to start a pension, according to a survey commissioned by Standard Life. There are two options in the private sector. If you are a PAYE employee your company may have an existing occupational pension scheme. Typically, the employer makes a contribution to this on behalf of the employee.

Large companies often contribute between 5pc and 9pc of annual salary to the pension. If you are earning €50,000 a year this works out at between €2,500 and €5,000 a year. Alternatively, the employer has to offer you access to a pension scheme even if it doesn't contribute to it. That's the legal requirement and has been for the past 15 years. Most women are unaware of this extremely important point, according to Aileen Power of Standard Life.

6 the Pension age has gone up

The State pension is now 66, up from 65 previously.

For those retiring from 2021 on it goes to 67.

For those retiring from 2028 the State pension will not be paid until 68.

However, many employers are still sending employees into retirement at the age of 65.

That is why the Citizens' Assembly called recently for the abolition of the mandatory retirement age.

7 You may have to work until you are 70

People should not get the State pension until they reach the age of 70, a State-supported think tank has recommended. Moving the statutory retirement age to 70 would counteract a fall in the workforce and the rise in the number of pensioners, the Economic and Social Research Institute said recently.

The chances are that this will be introduced. Currently, there are around six workers for every pensioner. Over the next 30 years this is due to fall to around two workers for every pensioner, adding to the costs of State pensions.

8 Maternity leave should not affect pension rights

If you get maternity benefit, you will get State pensions credits automatically. But this ends after 26 weeks. This means that if you take further unpaid leave, you will need to get your employer to complete the application form for maternity leave credits when you get back to work.

If you are taking parental leave, you should also be entitled to credits. But you have to apply for these.

9 You may get a spouse's pension

If you are married but do not qualify for a pension, you may be entitled to what is called a "qualified adult" pension. This can be up to €213.50 for those over the age of 66. The payment is means-tested.

However, the concept of women being dependent on their husband in retirement is not appealing for women. If your husband has died and was a member of a defined-benefit pension scheme, you are likely to be entitled to a spouse's pension, usually half the amount he got in retirement.

10 Pensions adjustment order

A court may make a pension adjustment order in the case of judicial separation, divorce and dissolution proceedings. This designates part of the pension to be paid to a spouse and dependent children.

The judge decides how much of the pension should be designated, according to the Courts Service.

The effect of such an order is that the designated part of the pension remains in the pension scheme but is payable to a spouse and children when the other spouse reaches pension age or dies.