Housing Minister admits retirees will have to dip into pensions to pay rent

The Government has been strongly criticised after it was revealed ­yesterday that the new auto-enrolment pension scheme is needed to help pay rent for the increasing number of older people who will not own a home when they retire.

A confidential memo brought before Cabinet on Tuesday said the new scheme will be "particularly important" as home ownership rates decline.

"An increasing number of older people will need sufficient income to meet rental costs during their retirement years," the memo stated.

Speaking yesterday, Mr O'Brien said it was "not correct" to say the function of the new pension scheme is to enable pensioners to pay rent in the future.

"People can interpret what was in the memo in whichever way they wish," Mr O'Brien said.

"The idea that this is framed in a way that is simply looking at increasing pension coverage so that people can pay their rent into the future is not correct.

"That is not the reason why the Government is doing it."

But asked if the Government is worried that an ageing population will have to use their pensions to pay rents, he said "of course" the Government would have to look at it.

"That's something that, as the population ages, needs to be addressed as well and that needs to be addressed through housing provision.

"It is something that we're going to have to watch as ­certain parts of the population get older."

Meanwhile, Taoiseach Micheál Martin came under fire at Leader's Questions in the Dáil, with Social Democrats co-leader Catherine Murphy saying people will be forced to "raid" their pension funds to pay rent in their 60s.

"If anyone thinks the answer to the housing crisis of 2022 is modest pensions that will accrue to people in 20 or 30 or 40 years from now, is it any wonder we're in the mess we're in?" she asked.

The Taoiseach said he was "taken aback" at the criticism and the whole point of the new auto-enrolment plan was to allow people to have "quality of life" in their retirement.

But Ms Murphy said: "Renters reading the Irish Independent today will have been tearing their hair out.

"Hundreds and thousands of them don't have pensions. Why? Because they can't afford one while paying exorbitant rents of around €2,000 a month and struggling with a very acute cost-of-living crisis."

She said the declining rate of home ownership, which fell from 79pc in 1991 to 68pc in 2016, is a huge concern.

Sinn Féin leader Mary Lou McDonald said there was "crisis upon crisis" as Ukrainian refugees join an accommodation emergency. Mr O'Brien said that around 35,000 additional homes will be needed over the next few years to accommodate an unprecedented number of refugees coming into the country.

Local authorities have been asked to submit a list of certain sites which could be used for housing.

The Government has also identified 500 properties which could be converted into housing.