Aviva, as the sixth largest world insurer and the leader in life and retirement savings insurance in Europe, has presented the results of its annual study on the behaviour of Europeans in addressing the issue of retirement.
Aviva, as the sixth largest world insurer and the leader in life and retirement savings insurance in Europe, has presented the results of its annual study on the behaviour of Europeans in addressing the issue of retirement. Two priority populations have been analysed in particular: 18-35 year olds, and ‘pre-pensioners’ with 10 years to go before they retire. Opting for a generation-based approach, the inquiry was carried out in 2010 in seven countries.
Even though behaviour patterns, perceptions and prospects differ, and the situation appears to be more optimistic for the younger generations, one constant factor emerges in general: the difficulty of preparing oneself and saving in order to ensure a satisfactory standard of living in retirement. The French, despite the recent debates held at the time of retirement reform, are no exception to this.
Pre-pensioners: expectations and behaviour patterns out of step with reality
At European level, seven out of 10 people are still hoping that the State will finance their retirement. On the other hand, while fully taking if for granted that they will be able to benefit from a long and comfortable retirement, 44% of the persons questioned think they need all of their monthly salary, while a quarter of them decreased, indeed completely stopped their savings efforts.
France sets itself apart in terms of a few specific aspects: the "pre-pensioners" are paradoxically the least inclined to rely on the State to finance their retirement, in relation to other European "pre-pensioners". In fact, only 43% of French people think that the system of retirements will be sufficient to ensure their standard of living, as against 71% of Spanish and 62% of Italians.
They are also the most numerous in terms of having already thought about the necessary resources for this period, and 50% of them are thinking of having to work beyond the legal retirement age.
On the contrary, even though the French are the ones with the highest expectations in terms of income, with about six out of ten people thinking that they need all of their monthly salary, there is still a significant proportion of them that hasn’t yet thought about the future (21%) and they are the most numerous in reducing or stopping their savings. For example, one French person out of five has planned to stop saving next year, as against less than one out of 10 in Italy and Spain and less than one out of 20 for Polish "pre-pensioners".
The 18-35 age group: a generation with low awareness and with little long-term foresight
Current concerns on financing for retirement in Europe have given rise to a certain raising of awareness among young people. But in terms of action, the 18-35 age group is not taking any action at all to save with a view to their retirement.
Their relationship with retirement is still confused. In fact, while 60% of young Europeans claim to be concerned that they don’t have enough money to satisfy their needs, 33% admit that they don’t understand the retirement system. However, more than 51% are not interested in financial information or consultancy, and 47% do not want to be helped. Furthermore, more than half of them are more inclined to address the management of their current expenses than make long-term financial plans.
In France, this young generation tends to be more optimistic about the near future, compared with the rest of the population. But globally, just like their European contemporaries, the French say that they are ill-informed and concerned about the future. In fact, more than 52% feel less confident for the future than they were a few years earlier.
Another paradox of the French is this: taking into account the rise in life expectancy, 71% of them think that they will have to work longer to finance their retirements, but only 19% of them say they are prepared to make this effort.
Potentially more optimistic prospects for the younger generations
In 2010, Aviva calculated that the annual deficit of retirements in Europe - corresponding to the difference between the amount that the citizens should contribute on a yearly basis over the period from 2011 to 2051 in order to maintain their standard of living, and the provision currently available in all 27 European countries - amounts to 1,900 thousand million euros.
This figure shows that if the contributions for retirements don’t increase, the majority of people will be forced to considerably reduce their standard of living. The situation would risk being even more delicate for the "pre-pensioners" who, not having had the time to save in order to consolidate their retirements, will have to work for longer or decrease their aspirations as soon as they take it.
The situation is more optimistic for the younger generations if they start to prepare for their retirement as of now, and if the demographic curve remains well oriented.
Igal Mayer, chairman and director general of Aviva Europe, said: “Last September, a study carried out by Aviva made it possible to identify an annual deficit in the order of 1,900 thousand million euros to finance the retirements of all 27 European countries. This figure is very worrying. And even more worrying is the fact that our annual inquiry for 2011 shows that European citizens do not appear to be willing to modify their behaviour with a view to financing their retirements better.
“The deficit of retirements is a major corporate subject which concerns all sections of the public: individuals, governments and businesses must work together to find a viable solution to help each individual to prepare his or her retirement as well as possible. To offer citizens an annual statement of premises of retirement is a simple and direct way to arouse the interest of young people who don’t understand the retirement system and don’t pay any attention to financial information and consultancy. Consequently, we feel it is important for the European Commission to take into account the teachings of the study, in the white paper on the subject of retirement which will appear next autumn”.
Karim Natouri, director of communication and durable development of Aviva France, said: “The results of the study carried out by Aviva indicate that in France, awareness to the question of preparation for retirement and education on financial planning must be pursued and intensified so as to help French people to become aware of the importance of preparing for this stage of life.
“At our level, we are trying to contribute to it by providing consultancy and practical tools through our education website www.questions-et-retraite.fr which particularly includes a simulator that allows one to calculate his retirement.
"In the end, the education effort will be profitable. It will allow French people to prepare themselves better, make their choice in full knowledge of their situation and maximise the efficiency of their savings”.
About the study:
These data are extracted from the generational analysis ordered by Aviva and the inquiry carried out by The Futures Company in 2010. This research was carried out in seven countries, to which are added two waves of CAS (Consumer Attitudes to Saving) studies in five countries.
The countries concerned are Ireland, France, Italy, Spain, Poland, Turkey and Russia (the latter two did not take part in the CAS study). The study is based on the answers of 8,709 questioned persons representing two generations, in Ireland (1,571), France (1,265), Italy (1,354), Spain (1,522), Poland (1,461), Russia (890) and Turkey (646).
Two populations were studied: the young generation aged from 18 to 35 years (6,197 participants) and pre-pensioners aged 55 years and over (2,512 participants).
-ends-
Press contacts:
Angélina Causse (Edelman) - 01 56 69 72 94 e-mail: angelina.causse@edelman.com
Estelle Joubert (Aviva) - 01 76 62 57 86 e-mail: estelle_joubert@aviva.fr
About Aviva:
Aviva is the 6th largest insurer in the world1 with more than 53 million clients spread over Europe, North America and the Asia-Pacific zone. The major trades of the Aviva group are life insurance and long-term savings, assets management and damage insurance, with a total turnover of 55.4 thousand million euros and 468 thousand million euros of assets under management on 31 December 2010.
Aviva is the most important insurer in the United Kingdom and one of the major life and retirement savings insurers in Europe. The press space www.aviva.com/media comprises images, press releases and product information of the Aviva group.
The videos are accessible via the website www.aviva.com/media/b-roll-library.
To follow Aviva on Twitter: www.twitter.com/avivaplc.
With more than 180 years of experience in France, Aviva is positioned among the 10 major insurance market players. Aviva France offers a complete range of products to three million clients, individuals, and small and medium businesses. The company is distinguished by the solid and profitable model of multi-distribution (875 general agents, 1,800 agency collaborators, 1,000 brokers, 400 life consultants, 900 UFF2 management consultants).
Aviva France also has partners such as the AFER3, the largest savings association in France, the Crédit du Nord Group, and vehicle manufacturers. Aviva directly employs more than 4,700 collaborators. On 31 December 2010, it recorded a consolidated turnover of 7 thousand million Euros and a net profit in IFRS4 accounting base of 304 million Euros. The company had 80.7 thousand million Euros of assets under management on 31 December 2010. For further information on Aviva France, consult
www.aviva.fr/assurances/assureur-aviva/aviva-presse.
1 On the basis of the world gross premiums issued on 31 December 2010.
2 Union Financière de France - a French banking consultancy organisation.
3 Association Française d‘Épargne et de Retraite (French Savings and Retirement Association)
4 International Financial Reporting Standards.