Three quarters of Irish people don't understand how tax relief on pensions works, according to a survey carried out by Irish Life & Permanent.

Moreover, almost half of those without a pension have no intention of starting one in the next 12 months, the study published yesterday as part of the bank's 2007 personal finance review shows.

This confusion about tax benefits and the refusal to take on a pension compares with 56 per cent of respondents saying they understand how the Special Savings Incentive Accounts (SSIA) work.

More than 1.1 million people signed up for the SSIA scheme, which was set up by the Government to encourage people to save for the future. Irish Life estimates that 57 per cent of the schemes will mature in April of this year.

As a result Irish Life & Permanent is calling on the Government to introduce an SSIA-style incentive scheme for pensions, which it believes more people will sign up for.

Under the SSIA scheme, for every €4 put in by the saver, the Government invests €1.

The bank also said the findings of its survey show that the Government's existing regime of allowing people to put extra cash into their pensions without paying tax on the money isn't working.

"The sad reality is that the current tax incentive for pension savings has little real impact on consumers," said Dervla Tomlin, head of marketing at Irish Life (Retail.) "They believe it is overly complicated and confused and the confusion which surrounds that issue does nothing to encourage greater saving for pensions."

According to Ms Tomlin, 42 per cent of the survey's respondents said they would be much more likely to start a pension this year if there was an SSIA-style incentive for pension savings. However, the number of SSIA-holders claiming they want to continue saving once their accounts mature fell to 64 per cent, from 70 per cent in July last year.

Ms Tomlin said that while the number wanting to continue saving had declined, it remains "very significant".

Separately Niall O'Grady, head of marketing with Permanent TSB Bank, said 2006 had been a very successful year for the bank, which saw it increase its share of the mortgage market by 3.9 per cent to 22.3 per cent. This year the bank also plans to move into the sub-prime mortgage lending market through a venture with Merrill Lynch and is aiming to take about a third of that market, which is estimated to be currently worth about €1 billion.

Mr O'Grady said he expects house prices to continue rising this year, albeit at a slower rate of between 4 and 6 per cent. Still, he said the Irish housing market remains strong despite the recent ECB interest rate rises.

During the year Permanent TSB opened 84,500 new current accounts, up from 67,000 in 2005 as it benefited to the detriment of its rivals as customers of other banks switched to Permanent TSB to take advantage of its free current account offering. This year it is offering three-months interest-free overdraft to help entice more customers to switch.