Thousands of people are set to lose out on the State’s new auto-enrolment pension scheme, which is already being heavily criticised for being years behind schedule.

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Pension consultants Mercer said around 700,000 people who should be opted into the new system look set to be excluded.

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The scheme is not due to be launched for another two years, despite being 20 years in gestation.

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Some six out of 10 private sector workers will have only the State pension to rely on in retirement as they are not members of an occupational or private sector scheme.

Social Protection Minister Regina Doherty last week announced more details about how the scheme will work, following a Cabinet meeting.

A key change from proposals previously announced on auto-enrolment will mean a more modest timescale for increasing the contributions of employees and employers.

The new scheme is due to be launched in 2022. It will apply to 585,000 private sector workers who have no pension provision at present.

These people will be automatically opted into the new scheme. Those aged between 23 and 60 and earning more than €20,000 will pay 1.5pc of their pay for the first three years.

Their contribution will rise by 1.5pc every three years after that, until it reaches 6pc of their wages at the beginning of year 10.

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