Romania: 'A house is not a pension; it’s a home'

In the last few years, the property market in Romania has been hit by an explosion in the price of residential properties, this being a priority area into which people channel their income; in a recent study carried out by the Aviva group*, four out of five Romanians (82% of those surveyed) consider investment in property to be the best form of "investment for the future". This statistic bears out the fact that, a very large number of Romanians could see their savings compromised (including savings for retirement) in the event of a drastic fall in property prices in Romania. This phenomenon is not only present on the Romanian market - the Irish and the Americans are even more dependent on property market prices.

"Investments in the property market accrue significant income, and so it is quite simple for those who decide to invest with a view to their retirement to opt for the property sector in which to invest their money. But, a house is not a pension; it's a home, so we are advising all Romanians who still have a number of years left before reaching retirement to be wary and not to put all their savings in one place, thereby quite easily lowering the risk of each investment," according to Shah Rouf, director general of Aviva Life Insurance.

You don't save and you're worried about this
The concept of saving money has a different significance for everyone, up to a point - some being worried about the idea of saving, others not so.

Of the 21 countries and 50,000 people interviewed worldwide, the Romanians proved to be those who were most worried about the fact that they don't save enough for their retirement. 34% of the Romanians interviewed are worried that they don't save enough for retirement, compared with only 9% of Germans and 4% of the Dutch.

Some additional information
The complexity of the concepts of pensions and medium and long-term savings appears to be an extremely important motivating factor behind the reticence of people across the whole world to save for their retirement.

• 42% of Romanians interviewed agreed that they "do not entirely understand the concepts of pensions and savings"
• 56% of Romanians state that "plans for their own finances are quite vague", but 58% are worried that "they will not have enough money at the time of their retirement to allow themselves to have a decent standard of living"
• Three out of five Romanians (62%) consider that the state will not provide them with sufficient income to enjoy a decent living after retirement
• Only one in 10 Romanians currently has a pension plan, compared with one in four east Europeans and one in two western Europeans
• 41% of Romanians are looking to do something now to ensure that they will maintain an adequate level of income in retirement*.

Shah Rouf makes the following comments on these statistics: "It's clear that there is a lack of information in Romania as regards financial planning; equally, there is quite a large number of people who want to obtain clear and concise information in this area. In most cases, in order to find out this information, Romanians resort to the internet as their source of information.

"This is one of the reasons why we are coming into the Romanian market with a first: we are offering free concise and clear information about pensions by means of the financial planning service LifePlan 123 and the pensions calculator on our website www.aviva.ro. Through this we are helping Romanians to have a better understanding of what a savings plan for retirement entails and how a plan adapted to their own possibilities might be put together.

"Aviva Life Insurance, the number one in Europe for life insurance policies and pensions, will soon be launching a private pensions plan which can help Romanians to save for their retirement, in a way that is not at all expensive and at the same time efficient from a tax perspective. Aviva is one of the first two life insurance companies to have received authorisation to operate as an administrator of voluntary pension plans (Pillar III), proceeding in May to begin the actual sale of this product," concluded Shah.

For further information, visit http://www.aviva.ro/ and register for a free financial health check.

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For further information:
Giliola Ignat 
Marketing Manager/Advertising & PR 
Telephone: 203 83 73

Note to editors:

* The survey "Consumer Attitudes to Savings - 2006" was carried out by Henley Centre Headlight Vision in the first semester of 2006 commissioned by Aviva plc. Henley Centre Headlight Vision provides information, consultancy and research solutions to clients worldwide. HCHLV has representatives across the world, with offices operating in London, New York, Mumbai and Delhi and representation in 28 countries. GfK Romania dealt with the study on the Romanian market.

• None of the findings of the Aviva study may be reproduced without acknowledging the source: Aviva Life Insurance
• The Aviva group is the largest provider of private pensions and life insurance policies in Europe, and is the leader on the majority of markets in which it operates.
• The main activities of the Aviva group are long-term savings plans, the administration of funds and general insurance policies, administering €525 billion worth of assets - as at 31 December 2006.
• The survey Consumer Attitudes to Savings was carried out in 2004 in 11 countries, in 2005 in 16 countries and in 21 countries in 2006. 2006 was the first year in which Romania was included in the study. The other 20 countries were: Hong Kong, Spain, Taiwan, China, Czech Republic, Hungary, India, Lithuania, Poland, Russia, Turkey, Great Britain, Ireland, Australia, USA, Singapore, Italy, the Netherlands, France and Germany.
• Aviva the number one in Europe - statistics generated by annual reports published by companies confirm the fact that Aviva is the largest provider of pensions and life insurance policies in Europe (as at 31 December 2006).

According to reports published by companies in the first quarter of 2007 - results in terms of new sales. APE represents the companies' standard measure for volume of business generated in 100% regulated premiums and 10% single premiums. The average exchange rate for December was used for the equivalents in euros for pounds sterling and dollars.

L&G, Fortis and Aegon reported results obtained from smaller operations, integrated into the framework  of international results, so a prudent margin of 50% has been used, which is probably advantageous to European operations in general, but this has no effect on the market position given above.