Serious Money: It is extremely hard to get anyone under the age of 40 - sometimes even older - to take seriously the issue of pension planning, writes Chris Johns.

Long-term saving, whether for our old age or paying off the mortgage, is way down the list of priorities.

For understandable reasons, the subject is considered too dull for words. It is complex, but often made unnecessarily so by the jargon-laden tomes produced by the saving and investment industry.

It raises issues of old age and mortality that most of us would rather put off to another time, but pension planning is slowly becoming one of the great issues of our age.

Which is the greater threat to our well-being in the decades ahead, global warming or pensions? Well, we may either be too hot or too cold, depending on the weather forecaster we listen to, but we will, without doubt, be poor.

Whether we need to pay for extra heating or air conditioning - using non-fossil fuels no doubt - we will not be able to afford it.

The savings industry should be condemned for rendering a difficult issue more complicated than it needs to be. There are several reasons why this has happened.

All so-called professions cloud their skills in mystique to create an impression of expertise sufficient to justify the higher fees they charge.

The many and varied practitioners of the dark financial arts (this author included!) are no different. But, to be fair, there are lots of issues, some mathematics and one or two conceptual problems that are not easily explained.

The activities of government, particularly regulators, are partly to blame for encouraging far too many layers of complexity.

Ireland actually possesses one of the most progressive regimes on the planet, yet pension holders are assailed with NPPI, PRSA, ARF, SSIA and countless other acronyms.

I suspect that an unwillingness to slog through simple arithmetic lies at the heart of many people's decision to switch off when it comes to pensions. It's not so much that we are all mathematically challenged, but more that the results of any number crunching exercise are so unpalatable.

Take the simplest question of all: how much do I need to save to achieve an adequate pension? This seemingly innocuous question quickly becomes very complicated once we start digging.

We need to know so many variables to be able to provide a sensible answer.

How old is our hypothetical saver? What age is he/she going to retire at? How long is he/she likely to live?

We need to know something about the investment returns he/she is likely to earn on his pot of savings and how those savings will be affected by his or her career progression.

So the first very sensible decision our future pensioner makes is to hand all of this over to the experts. Let's say that our saver is just starting work after college and is earning €25,000.

The finance professionals will suggest that he starts saving immediately, which is something few people in their early 20s will be either willing or able to do.

In the unlikely event that he does take the advice, he will be told that the amount he has to save will depend on what he will need in retirement and, perhaps, the prevailing level of annuity rates in 40 years' time.

The standard way to illustrate all of this is to make some assumptions about salary growth and investment returns. The old-fashioned final calculation assumed that the pension fund is ultimately used to purchase an annuity.

Using fairly routine assumptions about all of these variables brings one to the startling conclusion that somebody starting work at 21 on the kind of salary suggested - with reasonable growth thereafter - will need to save around 25 per cent, every single year, if he/she is to retire on the standard two-thirds of final salary pension.

Different assumptions can change these results of course. If our saver is lucky enough to find an above-average fund manager who can deliver superior investment returns, he/she will not have to save so much each year.

Such an option is not, of course, open to the State as a whole - as a society we earn, by definition, the average investment return. Simple and clear messages are, if we look hard enough, starting to emerge from the industry.

The Society of Actuaries in Ireland should be congratulated for recently stating that an individual targeting retirement at 65 should aim to amass savings equal to 10 times final salary if you want a pension equal to just half of that final salary.

Over a typical 40-year working life, this means saving around 25 per cent of income. Such calculations are in the same ballpark as the one above and get the message across much more starkly.

Hands up all those currently contributing a quarter of final salary to a pension fund? Anyone out there who reckons they can do that for 40 years? Compare these sorts of numbers to a leaflet currently available in post offices around Ireland that try to encourage people to start saving for a pension (very laudable) with "as little as €25 a month".

By all means persuade people to get the saving habit but don't even hint that there is much point to putting aside €25 a month.

On the subject of arithmetic, Brian Cowen is often congratulated for the State's low level of debt. If we added in the liabilities building up because of public sector pension commitments, we would not think of ourselves as debt-free. One day, all our taxes will have to rise to pay those pensions.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.