'The Retirement Optimism reading dropped sharply to 99 in November from 105 in September' Stock image

Almost one in two people are concerned that they are financially unprepared for retirement, according to a savings and investment index from the Bank of Ireland and the Economic and Social Research Institute.

The Retirement Optimism reading dropped sharply to 99 in November from 105 in September.

It is part of an overall Savings and Investment index compiled by the two bodies, using a minimum of 800 people, which saw a rise to 100 from a reading of 99 as the stock market carnage of October ebbed.

"The drop in confidence around retirement provision is significant and just half of respondents feel financially prepared for retirement," said Tom McCabe of Bank of Ireland Investment Markets.

Separately, Standard Life warned proposals calling for a halving of income tax relief on pensions for middle-income earners to 20pc or reducing it to 25pc would be calamitous for private sector workers.

The company submitted its findings to the Interdepartmental Pensions Reform and Taxation Group, which is expected to report by the end of the year.

"We anticipate the exact opposite - ie a mass exodus of those who consider reduced pension tax benefits unattractive and reduce their pension saving accordingly," said Michael McKenna, managing director of Standard Life Ireland.

"The squeezed middle might feel this is a bridge too far following the post-financial crash hardships endured."

Irish Independent