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How banks are making it easier to get rid of unwanted costly subscriptions

Banks have moved to make it easier for consumers to cancel unwanted subscriptions.

The changes are likely to come as a huge relief as many companies make it very difficult for customers who have signed up for services, such as gym memberships and TV and online streaming services, to get out of their contract.

Research in the UK has shown that unwanted subscriptions are costing people an average of €50 a month because they are too difficult to cancel.

Such subscriptions are an arrangement to receive something, typically a publication or an online service, regularly by paying in advance.

However, commentators say that some companies deliberately make it impossible to get out of the contracts.

Others refuse cancellations and request that they are given more notice, often seeking six months’ advance warning.

Some firms force consumers to contact them through their websites, providing no telephone number, then fail to reply to the online messages.

Banks have previously not let customers cancel the contracts and would take instructions only from the provider that set up the subscription.

Dermott Jewell, policy adviser with the Consumers’ Association of Ireland lobby group, said: “The amount of effort any individual has to go through to stop a subscription is ludicrous. People end up giving up and leaving the subscription in place.”

He said that subscriptions were very easy to sign up to but could be difficult for consumers to get out of later.

Daragh Cassidy, of price comparison site, said customers could cancel a direct debit by giving advance notice, usually in writing, to their bank and their service provider. Most providers require around a month’s notice. However, banks now allow customers to easily cancel direct debits themselves immediately through their internet banking platforms.

Mr Cassidy said: “While the advice is always to let your provider know you’re cancelling so they don’t keep billing you, this can be handy when a provider has been slow to respond to a customer’s initial cancellation request.”

AIB said it had streamlined its cancellation service for what it called recurring transactions associated with debit or credit cards. It can now take instructions directly from customers and stop the transactions. “Previously, customers had to provide evidence that they had attempted to cancel a recurring transaction directly with the merchant but were continuing to be charged,” the bank said. This facility is available on credit and debit cards but not for wider current account direct debits.

Bank of Ireland said: “With regard to current accounts, recurring payments instigated by merchants would be direct debits, and the customer has the ability to cancel these through the mobile app.”

Ulster Bank said payments linked to cards could be cancelled directly with the bank and account-linked direct debits could be cancelled online through Anytime Banking.

A Permanent TSB spokesperson said: “We can cancel recurring payments if the customer tells us they have tried to do so and had no success.” This applies to both credit and debit card payments.

KBC Bank said it was looking into a way to take instructions from customers to stop card subscriptions.

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Large numbers of SMEs yet to prepare for payroll shake-up

Large numbers of smaller firms have admitted they are not prepared for changes in how payroll systems interact with Revenue that are due to come into force in January.

An overhaul of the Pay As You Earn (PAYE) system is due to come into effect in five months.

But 40pc of firms are not prepared for the changes, according to a survey of 200 firms which was commissioned by Big Red Cloud, a firm that supplies payroll software.

A majority of the firms surveyed said they were short of detail on how the new PAYE system will work.

From January, the new system will see employers submitting payroll data on a regular basis.

This represents a fundamental shift from the present system where detailed payroll data is submitted annually in a P35 form.

Big Red Cloud said Revenue’s changes are warranted, given the fact that the existing PAYE system had been introduced in 1960, at a time when a job was typically for life and payroll was a manual process.

Every aspect of how an employer fulfils their PAYE reporting obligations will change to a real-time electronic submission of the data.
Big Red Cloud said that covers everything from commencing employment, statutory deductions (PAYE/PRSI/USC), as well as the cessation of employment.

Well-known forms, such as the P45, P46, P30, P60 and P35, will disappear.

The survey found that 66pc of small and medium-sized firms are “short on detail” on the PAYE system overhaul.

Just 5pc are “completely unaware” of the changes.

But 40pc of SMEs said they are “not prepared at all” for the January 1 modernisation deadline.

And just 15pc say they are confident they will be ready.

Big Red Cloud CEO Marc O’Dwyer said the Revenue changes represent a huge overhaul of the PAYE system, the first in 58 years.

“As the year progresses, it is becoming increasingly apparent to us that, not only are many businesses not ready, many are simply unaware and/or uninformed of the changes and what they will mean for their business,” he said.

He added it was important that owner/managers take the necessary steps over the next few months to ensure their business is Revenue-compliant by January.

Revenue Commissioners chairman Niall Cody said recently the modernising of the system and move to real-time PAYE “represents an important step in the process of continuous improvement in service, compliance and efficiency in our administration of the tax system”.

He said that improvements and efficiencies will be the end-goal but “businesses, particularly those at the smaller end of the scale, will need some help to get there

European shares slip on China weakness

European shares fell back yesterday as weakness in Chinese markets and worries over a trade dispute between the United States and China eclipsed optimism that a Nafta deal could be struck by today’s deadline.

The pan-European STOXX 600 ended the session down 0.3pc, while Germany’s DAX, which is sensitive to China due to its prominence as a German export market, dropped 0.5pc.

Chinese stocks fell after a Reuters poll showed activity in the factory sector was likely to have slowed for the third straight month in August amid uncertainty over an escalating trade war with the United States.

In Europe, trade-sensitive mining stocks tumbled 0.8pc.

“It’s a balancing act with, on the one hand, relatively positive momentum behind Nafta, but when the focus turns to China and trade war it doesn’t seem like an end is in sight because any escalation plays to Trump’s rhetoric of how he’s protecting US prosperity and jobs,” said Gary Waite, portfolio manager at Walker Crips Investment Management.

Though cars were also off earlier in the session, a concessionary tone from European Trade commissioner Cecilia Malmstrom on car tariffs helped lift the sector, which closed flat.

Earnings reports caused some sharp moves in individual stocks.

Shares in Europe’s largest property company Unibail-Rodamco-Westfield fell 4.3pc even though the company reported a boost to profits from its acquisition of an Australian shopping centre giant.

UK commercial property firm Intu fell 3.4pc after Morgan Stanley cut the stock to underweight from equal-weight, and peer Hammerson fell 5pc. Klepierre lost 3.3pc after a Morgan Stanley downgrade.

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US tech firm leaves Ireland for US after Trump tax cuts

Internet domain registry business Afilias has moved its headquarters out of Dublin to the US, citing recent US tax changes as a reason for the move.

It’s a sign that Donald Trump’s efforts to attract business home are having an impact.

“We’ve long had a strong US presence,” said CEO Hal Lubsen. “More of the company’s shares are now owned by Americans, and our executive group is increasingly becoming American.

“However,” he added, “nothing really changes for our customers and our vendors. Afilias continues to be a global registry services provider; our operations will not be affected.

As Afilias’s US market heats up, the company anticipates increased hiring and investment in the US. Otherwise, no new paperwork or other changes will be requested of customers; all our offices worldwide will continue to operate as they have in the past; and pre-existing staff arrangements will not change,” the company said.

Afilias has had its headquarters here since 2001, saying it had set up in Dublin originally because it thought the “.info” domain would prove popular here.

It also said the “make-up of its initial ownership and leadership groups” and “other financial considerations” had played a part in the decision.

Today its two largest customers are based in the US and this, alongside the tax changes, was a factor in the relocation.

The IDA declined to comment on the move, saying it does not comment on individual companies.

But IDA boss Martin Shanahan said earlier this year that Mr Trump’s tax changes were causing businesses to rethink plans to invest in Ireland.

“We have seen a slowing of decision-making coming out of the US and our read of that is that US companies are taking stock,” he said as the IDA announced its full-year results for 2017 in June.

“They are looking at the new tax rules which they’re now subject to in the US and they are, as one company put it to me, running the numbers again to see what that now throws out in the context of the new tax regime.”

At the end of last year Mr Trump enacted a sweeping reform of the US tax system, slashing the country’s corporate tax rate. He also made changes to the way some foreign earnings are taxed as part of a drive to bring US business back to American soil.

Mr Shanahan said that as of that time the number of companies looking at Ireland has not yet been affected, and his ambition was that if companies look to set up outside the US to find new markets, Ireland will be the place they choose.

Afilias saw revenue increase from $92.7m in 2015 to $106.7m in 2016, according to its most recently filed Companies Registration Office accounts.

Profit before income tax went from $36.8m to $38.6m.

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Avoiding a hard border in Ireland a ‘pivotal issue’ for Germany

Avoiding a hard border in Ireland is a ‘pivotal issue’ for Germany says Foreign Minister Heiko Maas.

“Any insecurity or deterioration in relation to Northern Ireland must not happen as a consequence of Brexit and in this regard we need to stand united and need the united voice of the 27 partners of the EU”, said Mr Maas today.

“We stand by our position we have to avoid a hard border; it is a pivotal issue,” he said.

German Chancellor Angela Merkel’s top ally was speaking at a press conference alongside Tanaiste and Minister for Foreign Affairs Simon Coveney in Berlin today.

The Tanaiste was addressing the annual conference of German foreign ambassadors.

He warned that the formal Brexit date of 29 March 2019 is “not far away” and that finding an agreement on the backstop was the most “difficult” issue.

But Mr Coveney said the Irish border was an “EU problem” and not just one facing Ireland.

“It’s not simply an Irish problem that needs to be resolved in these negotiations and the British government understands that”.

Meanwhile, both ministers refuted claims reported in the British press today which quoted UK Prime Minister Theresa May as saying that a No deal Brexit would “not be the end of the world.”

We do not want a no deal Brexit; we want a deal”, said Mr Maas.

“Brexit is difficult enough and if it takes place in a disorderly way it would be detrimental to all stakeholders involved which is why we are working towards forging an agreement.”

He added there should be some success “in the coming weeks because time is pressing”.

Mr Coveney said a ‘no deal Brexit would be ‘very bad news for Ireland and other EU countries’ and in Britain too.

He said the “various statements” emerging in the press about ‘no deal’ are designed to impact the negotiations, but says he is confident that a deal can be brokered.

“We will hear various statements as these negotiations proceed in relation to a No deal Brexit because it impacts on negotiation positions and so on; I don’t believe that a No deal Brexit is in anybody’s interest and I believe that we have the capacity to ensure that deals are done”, he said.

He also doubled-down on the need for the Irish backstop in the EU-UK Withdrawal Treaty, saying that matter would “not change”.

“It is certainly necessary as a fallback or insurance mechanism to reassure people they’re not going to face the consequences of a physical border on the island of Ireland again.

“That is an EU as well as an Irish position that’s not going to change

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Alan O’Neill: Selling is an acquired art – but a skill every company needs

Large organisations have clearly-defined corporate structures that remove ambiguity in roles and responsibilities. Regardless of the sector that they’re in, commercial organisations have a common denominator; they need to sell their products or services to achieve sales targets. Consequently, every one of them has a defined sales function.

The same can’t always be said for SMEs. Many entrepreneurs set up a business relying on the relationships they have with key people.

Or perhaps they believe so strongly in their product or service that they expect that sales will just happen. Others try to be proactive by placing advertisements using whatever media they deem to be appropriate.

For Pressure Welding Manufacturing (PWM) in particular, sales were achieved using three main strategies.

One was that Jack O’Dwyer had a tremendous reputation in the industry locally and business flowed in.

Another other strategy was to ‘land and expand’. In other words, when a project was won and any of the team landed on the customer site to carry out the agreed work, they might be asked to do extra work, or they might get to hear about other opportunities within that same customer.
Referrals were a third strategy, where existing customers might recommend PWM to others because of their great work.

The Challenge
These reactive strategies were effective when the market was strong and there was much less competition. Such strategies can also be improved upon with a proactive approach. This is a relevant reality even for my own business.

I never feel safe in the knowledge that the telephone will ring with opportunities. Yes, relationships and referrals are a key opportunity driver for us too. But that approach feels to me to be a little too passive and it leaves our destiny in the hands of others.

I also appreciate that the skill of selling is very different to the main technical skills of whatever profession you’re in. Jack is a top-tier engineer. He has also done a great job of selling. But he’d be the first to agree that a more proactive approach is needed in this changed marketplace.

The risk is that if you’re waiting for a call and it doesn’t come, you can’t always be sure of the reason.

How do you know if it’s due to client’s needs changing, or competitor activity, or wrong assumptions about your business, or rotation of decision-makers? Having a proactive selling methodology is essential for any business.

Change Tips for Building a Sales Pipeline
1 This starts with setting sales targets in the first place. Let’s say that you need to have annual sales of €1m to cover your costs and make a profit. Do a trend analysis of the last few years and identify what percentage you can safely rely on from a reactive perspective.

For example, let’s say that the trend shows that past continuity business, referrals and ‘land and expand’ opportunities accounted for 60pc of past sales.

Firstly, ask yourself, how sure can you be of achieving that number again this year. Be really tough with yourself and don’t make loose assumptions. Are you really sure?

2 Don’t rely on chance. Put a plan in place to proactively go after every prospect in that 60pc to ensure you maximise every opportunity.

3 That 60pc makes up part of your pipeline -­ now you should consider where the remaining 40pc will come from. Start with making a list of your prospect industry sectors and a target break down for each. Then within that list, identify the specific customer names and a target for each. (In a future article, we’ll explore steps on how to make contact with all prospects, existing and new).

4 With this pipeline, spread the opportunities across the 12 months to give you a visual of when the opportunities are likely to land. No target matrix like the one described here will ever work out exactly as planned. Some expected opportunities might never materialise and other new ones might appear. And that’s okay. The value of doing the exercise is that it gives you focus.

The Last Word
It’s commonly said that everyone is a salesperson of sorts, perhaps overtly selling a product or perhaps selling yourself in your career or relationships. But selling is an acquired art. I’m not at all convinced that you have to be ‘a born salesperson’ to sell. In fact, I have come across many people who are known for being able to “sell sand to the Arabs” – and some of them can be quite irritating.

If selling is new to you and if it causes you some anxiety, reach out for some help. There are numerous experts who will guide you, and the gain should more than compensate for the cost.

Alan O’Neill is managing director of Kara Change Management, specialists in strategy, culture and people development. Go to if you’d like help with your business.

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Global central banks set to dump £100bn of sterling in hard Brexit

Central banks holding sterling as part of their foreign exchange (forex) reserves could sell more than £100bn (€109bn) of the currency should Britain crash out of the European Union without a trade deal, a Bank of America Merrill Lynch (BAML) study showed yesterday.

The prospect of a no-deal Brexit is becoming increasingly feasible in the eyes of investors who are hedging against the risk of the currency tanking if Britain is left isolated from the EU, its largest trading partner.

Such a huge currency sell-off would likely drive down the value of the pound against key peers including the euro and the US dollar.

This in turn would make it less lucrative to sell into the UK market for Irish suppliers, and harder for industry here to compete on price with British producers.

Yesterday, British Prime Minister Theresa May, inset, unsettled markets when she said a so called no-deal Brexit “wouldn’t be the end of the world”.

Central bank selling could be a major catalyst for a significant sterling downturn should Britain prove unable to secure a deal before next March, BAML told clients, noting that global sterling reserves currently amount to nearly $500bn.

While International Monetary Fund data shows sterling comprising 4.5pc of total central bank reserves, BAML said sterling’s average share of global reserves since 1995 was 3.6pc.

A one percentage point decline in sterling reserves equates to £100bn of selling, it calculates. “In a scenario that central banks adjust their sterling holdings back to the long-term average (3.6pc), this suggests that they could sell upwards of £100bn in sterling reserves on a no-deal scenario, all else being equal,” the note said.


BAML still expects a “soft” Brexit in which Britain retains customs access to the EU, and said reserve managers would likely await confirmation of a no-deal scenario before making a portfolio shift.

“This [no-deal Brexit] is not our base case, but we think central bank flows are an important source of flow which could determine whether sterling succumbs to a more protracted current account crisis,” the bank added.

Meanwhile, Britain’s Treasury yesterday denied a newspaper report yesterday that the government had asked Bank of England Governor Mark Carney to stay on for an extra year beyond his scheduled departure in June 2019.

“We don’t recognise their reporting at all,” a Treasury spokeswoman said when asked about the article in the ‘Evening Standard’ newspaper.

A diary item in the newspaper said the ministry had “quietly approached” Mr Carney about staying another year to provide continuity as Britain leaves the European Union. “Our position is the same – we plan to start recruitment soon,” the finance ministry spokeswoman said.

Spokesmen for Prime Minister Theresa May and the BoE declined to comment on the newspaper report.

The value of sterling has fallen sharply since April as investors worry about the lack of progress in Brexit talks.

Mr Carney agreed to serve five years, rather than the usual eight, as BoE governor when he moved from his native Canada to Britain in 2013. In 2016, shortly after British voters decided to leave the European Union, he agreed to stay an extra year, keeping him in the job until June 30, 2019.

Mr Carney said in July he does not intend to change that plan. The ‘Evening Standard’ said government officials were struggling to find a candidate strong enough to replace him.

The person most tipped to be his successor is Andrew Bailey, a regulator with 30 years of experience at the BoE. He is currently head of the Financial Conduct Authority, one of the country’s main watchdogs for the financial services industry.

The ‘Evening Standard’ is edited by former Chancellor George Osborne who appointed Mr Carney to the BoE

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Chinese bitcoin mining rig makers aim to raise billions in HK IPOs

Three of the world’s largest bitcoin mining equipment makers plan to raise billions of dollars with initial public offerings in Hong Kong, even as other companies report plunging demand for the chips needed to make bitcoin and a halving in the price of the cryptocurrency.

Soaring cryptocurrency prices last year triggered a boom in demand for specialist mining chips and in developing “mines” – facilities with thousands of machines that create the coins by solving complex mathematical puzzles.

Yet the US chipmaker Nvidia Corp said this month that second-quarter sales to crypto miners totalled just $18m, compared with $100m expected by analysts.

Nvidia’s chief financial officer, Colette Kress, said she anticipated “no contribution” to revenues from cryptocurrency in coming months.
That has raised concerns about the upcoming Hong Kong listings by three Chinese manufacturers of bitcoin mining equipment, Bitmain, Canaan and Ebang International Holdings.
The companies all design high-end computer chips intended for mining cryptocurrencies, particularly bitcoin, and sell mining equipment containing the chips. In addition, Bitmain mines cryptocurrencies on its own account. Companies like Nvidia also sell specialty chips used for mining.

“The marked decline in the price of bitcoin since the start of the year is likely to weigh on investors’ interest in these companies,” said Benjamin Quinlan, CEO of financial services consultancy Quinlan & Associates.

But, he added, “the fall in the price of bitcoin from its peaks has not been matched by an equivalent fall in the numbers of people mining it.”

Bitcoin is currently trading at $6,699, down 64pc from its December 2017 peak of $18,690. Daily mining revenue was 77pc lower than in December, according to, a data analytics and wallet provider.

“As the bitcoin price decreases, so does the profitability of mining itself, which decreases demand for mining chips and miners,” said Wang Leilei, a consultant at financial services consultancy Kapronssia.

It is not just the price of bitcoin that is causing worries. People close to the IPOs said regulatory scrutiny and a patchy performance by Hong Kong offerings this year were additional concerns.

Julian Hosp, president of TenX, a Singapore-based blockchain firm, has also warned that if coins switch mining algorithms, then the machines designed to mine them would become useless.

“I would be quite wary of investing in these miners,” Hosp said, referring to the equipment makers. “They are not long-term businesses and I think they’ve had their uptrend for now.”

Canaan and Ebang filed plans in May and June respectively for floats in Hong Kong, while Bitmain is expected to file its plans next month for an IPO in which it aims to raise at least $3bn, sources close to the deal said.

Cryptocurrency trading is a global activity, but Chinese chipmakers have led the way in developing the most efficient means to mine the coins.

Bitmain had three quarters of the market for the specialist chips last year, followed by Canaan on 14pc, according to estimates by analysts at Bernstein.

Ebang is aiming to raise up to $1bn, according to sources, while Canaan is targeting at least $400m – down from a figure of up to $2bn touted earlier this year by people involved in the deal.

While EBang is expected to face Hong Kong’s listing committee in September – a key approval needed for marketing the IPO – Canaan’s offering is taking longer.

Two sources familiar with Canaan’s situation said the company had not yet fixed a date for a committee appearance, as it worked on clearing up questions from HKEX officials regarding due diligence done on its prospectus.

A source close to Bitmain’S IPO said the company was aware about the potential for close regulatory scrutiny.

Bitmain, Canaan and Ebang didn’t respond to requests for comment. A Hong Kong exchange spokesman declined to comment.

The bitcoin price slump is leading miners to consider their IPO sales pitches carefully, with many involved expecting them to push the potential of other uses for their chips.

Both Canaan and Ebang highlight the potential for their technology to be applied to other cutting-edge sectors.

That includes broader development of blockchain applications – the ledger system that underpins bitcoin and which is being widely explored by the financial industry – as well as artificial intelligence tools and the forthcoming build-out of 5G telecoms networks both within and outside China.

“The mainland government encourages chip design and production, as that is a segment of China’s market that has been suffering,” said Kapronssia’s Wang.

“Bitmain and Canaan chips could also be used for non-bitcoin applications, like blockchain in general, big data, cybersecurity or AI, which is an advantage for the companies.”

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Euro tipped to near parity with sterling under hard Brexit

Sterling will fall to 95 pence to the euro and approach parity in the early part of next year if a hard Brexit is still on the cards, according to analysts at Investec Ireland.

Currency volatility, and unfavourable rates, are a big risk to Irish exporters into the UK, particularly in lower margin sectors including food.
Weakness in sterling versus the euro also potentially hurts the overall competitiveness of the Irish economy.

The euro will strengthen to 95 pence versus the pound by the end of the year, and 97 pence in the second quarter of 2019, if there’s a hard Brexit, according to Investec’s head of treasury, Aisling Dodgson
That view is based on a UK exit from the EU without a transition period or agreement on regulatory alignment and Britain leaving the EU customs union.

It does not allow for an even more destabilising so-called worst-case scenario – where planes don’t fly and medicine supplies run out.

An alternative scenario, of an orderly transition, would boost the pound – to 87 pence in the final quarter of this year and 88 pence versus the euro in early 2019, Investec thinks.

With scant progress in talks to date, traders are increasingly pricing in a harder scenario.

Sterling fell to 90.390 pence per euro on Friday – an 11-month low.

“The markets increasingly sense that the risk of no deal is greater. I don’t think anyone would really suggest otherwise,” Aisling Dodgson said.

“At the end of the day our baseline case is if you strip it down to fundamentals it’s in no one’s interest for there to be no deal, but there are a couple of situations where you could see relationships breaking down,” she added.

Infighting – and lack of communication – within the UK’s ruling Conservative Party is now a major issue, she noted.

Conservative backbencher – and Brexit hardliner – Jacob Rees Mogg was lambasted over the weekend for holding up the Troubles-era Border regime as a model for post-Brexit controls.

“There would be our ability, as we had during the Troubles, to have people inspected,” the Tory MP said.

“It’s not a Border that everyone has to go through every day. But of course for security reasons during the Troubles, we kept a very close eye on the Border to try and stop gun-running and things like that,” he said at a meeting in the UK.

The Foreign Affairs Minister Simon Coveney branded the comments “ill informed”.

The uncertainty around Brexit is starting to weigh on sentiment here, according to Bank of Ireland’s regular ‘Economic Pulse’ sentiment tracker.

The index, which combines the results of consumer and business sentiment gauges, weakened in August versus July and compared to August last year.

Bank of Ireland’s chief economist, Dr Loretta O’Sullivan, linked the more subdued mood to uncertainty around the Brexit negotiations, coupled with renewed sterling volatility.

“Amid political divisions in the UK government and the EU’s lukewarm response to elements of the White Paper (setting out the UK negotiating position), there has been increased chatter about the possibility of a ‘no deal’ outcome to the negotiations. This is weighing on sentiment and is also impacting currency markets.”

There is now just over a month until the initial deadline for Europe and the UK to reach a deal.

However, the talks are deadlocked, with a failure to settle arrangements that square the circle of the UK government’s agreement to retain an open Border on the island of Ireland, with its plan to leave the European customs union.

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Pension model doesn’t have to be perfect, but we must act now

The retirement model for Ireland is changing after various false starts – a change that is long overdue. A sustainable retirement system with feasible dependency ratios requires that workers save more and retire later.

We won’t get a perfect system overnight, so having one that’s “good enough”, at least to start, is an important priority.

The key thing is to take the first step and raise pension coverage immediately, or risk further delays in reform.

That’s why the publication this week of the Government’s consultation paper on supplementary pension provision in Ireland has the potential to be such a landmark moment.

It’s critical that we grasp the nettle with both hands and take decisive action to increase supplementary pension coverage in this country.

The Government’s Roadmap to Pensions Reform, published in February, set out important measures to improve the financial security of Irish people in retirement, such as evolving the state pension age and the introduction of automatic enrolment.

Measures to improve the adequacy of the State pension can only be good news. However, with only around 35pc of Irish private-sector workers enrolled in occupational pension schemes, we can’t stop there.

We’re not the only country facing a timebomb when it comes to pensions – this is a global issue.

In setting off on a path of reform though, we have the advantage of being able to follow in the footsteps of other countries that have gone before, replicating some of what works and taking lessons from what does not.

Our nearest neighbours took this route only a few years ago. More than 10 million UK workers have been enrolled in DC plans since 2012, when employers were required to enrol staff in a workplace pension, and experience in the UK has shown that, once members are auto enrolled in a well-designed scheme opt-out levels are extremely low – at fewer than one in 10.

Appreciation of human behaviour needs to be at the heart of pension policy and is key to the successful implementation of any scheme.

A successful automatic enrolment system requires a well-designed ‘default’ investment strategy that people will not be inclined to opt out of.

Expecting ordinary citizens to make investment decisions that will impact on their future financial security is a big ask, and may not be welcomed by many.

People may struggle to choose appropriate investments, and indeed research this year showed us that only 32pc of Irish DC members knew what their pension was invested in.

That’s why a default option that is well-diversified, good value and appropriate for the life stage for the saver in question is so important.

We will be faced with many tough questions at the start of this journey: are the measures being proposed going to be enough; will the contribution level be high enough; what approach do we take to increasing contributions over time; is there a better default strategy that we could design?

We’re not going to get all of this right on the very first attempt.

‘Good enough’ is an is an important priority here. A ‘perfect’ system will not be established overnight, so it is important to take the first step and raise pension coverage immediately, or risk further delays in reform.

As we progress on the path we can tweak and adapt as the system becomes established.

Consider a country like Australia, which has one of the strongest mandatory superannuation schemes in the world.

Contribution levels there now stand at 9.5pc and are scheduled to increase to 12pc and in time they will probably wish to go higher.

Similarly, the situation in the UK is evolving as time passes. Since April 2018 total minimum contribution rates stood at 5pc and this will increase to 8pc in April 2019, with many commentators suggesting further increases after that.

Auto enrolment is one of a suite of measures proposed in the Government’s Roadmap to Pensions Reform.

The roadmap comes at a time when dependency ratios are increasing and fresh approaches to better managing longevity risk and rectifying deficits in pension provision are hugely important.

We all know we need a sustainable retirement system. Now is the time for action.

Ann Prendergast is Head of State Street Global Advisors in Ireland

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