MAJOR funds will have to be set aside to tackle the hole in the country’s pension pot or the long-term consequences will be huge, Finance Minister Paschal Donohoe has said.

Finance Minister Paschal Donohoe said ‘the safety net for the majority of workers can’t simply be the State pension’He has admitted the Government needs to put a “greater focus” on pensions in the months ahead, adding that too much debate tends to “zero in” on the State’s old-age pension.

“The safety net for the majority of workers cannot simply be the contributory State pension. If we’re really going to deal with that, it means years of investment. We have to begin that journey,” Mr Donohoe told the Irish Independent.

Social Protection Minister Regina Doherty has a “broad action plan” that will aim to defuse the pension time bomb.

“What she has recognised is that we need to move the breadth of our policy work firmly into [including] the fact that nearly two-thirds of people who are working at the moment either don’t have pension provision for the future at all, or don’t have adequate pension provision,” Mr Donohoe said.

“It’s an area that will need more support from the State. If you look at the social contract for young to middle-aged people, part of that is going to be a sense that they are working later in life and when they stop working that there’s a genuine safety net there for them.”

Two-thirds of private sector workers currently have no pension, meaning many will rely primarily on the weekly State pension, currently €238.30, from the age of 66.

Mr Donohoe said “pre-emptive activity” was needed now because unless people were able to support themselves they will become more reliant on the State to get by in retirement.

“If we don’t deal with it right, the bill we face in the future will be far, far, far bigger,” he said.

The minister added that while a fix will come “at a cost”, it will be money well spent for our economy and our society as well.