Introduction
Demographic trends over the past 20 years show that European populations are ageing, with the ratio of retirees to workers set to increase from one in four in 2010 to one in two by 20601. While scientific and medical developments should be celebrated for enhancing longevity, we can't ignore the fact that longer life expectancy and falling birth rates bring new challenges for governments, individuals and industry. All relevant stakeholders should ensure that life is not just longer, but richer in every sense.
Policies adopted by national governments to start to address this range from modest increases in the state retirement age, a shift towards defined contribution schemes, and the introduction of mandatory or voluntary private pension schemes for all workers. These are positive steps, but governments still face ever-increasing pressure on public pension provision. This has been further exacerbated by the recent financial crisis and means that individuals will have to take increasing responsibility for providing for their own future.
To date, efforts to understand the magnitude of the potential under-provision in retirement across Europe have been sporadic and focused at a national level. With this report, Aviva seeks to bring a consumer perspective to the debate by exploring the difference between what pension provision people need for an adequate standard of living in retirement and the pension amount they can currently expect to receive.
We've worked with Deloitte to quantify this difference between expectations and reality - what we've termed the "pensions gap". The result of this analysis led us to question what assets people have beyond their pensions and how they feel about their financial prospects for retirement. To address these questions we explored the level of non-pension assets at the disposal of European citizens, and, in conjunction with The Futures Company, investigated people's attitudes to retirement.
This report takes you through the findings of this analytical journey, and provides a thought-provoking snapshot of savings across the continent. We've focused deliberately on the adequacy side of the debate - exploring questions such as "who will have what?", "what will they need" and "where will it come from?"- to give the EU, national governments and citizens alike an insight into what the future may bring and its implications.
This report contributes to the debate by identifying the scale of the problem and how it differs across Europe. It represents the start of a longer-term commitment by Aviva to explore and address these issues in partnership with consumers, governments and regulators, at both a national and European level.