Working together with the consultancy firm Deloitte, Aviva has estimated the additional savings which Europeans need to make every year in order to enjoy their retirement.
Working together with the consultancy firm Deloitte, Aviva has estimated the additional savings which Europeans need to make every year in order to enjoy their retirement. The main conclusion was that most of us need to start regularly saving for our retirement as soon as possible, as the money which has already been put aside will not be enough. The scale of the pensions savings deficit points to a pension gap.
The pension gap shows how much people planning on retiring between 2011 and 2051 need to put aside in additional savings in order to receive an income of 70% of their final salary. This level of retirement income is accepted as satisfactory in accordance with the OECD definition and social expectations.
The annual pension savings deficit in Europe is €1.9 trillion or 19% of the estimated GDP for EU countries in 2010.
The annual pension gap calculated for individual countries gives a better idea of the problems facing the pensions systems. For Poland this gap is €68.8 billion, or 275.2 billion zlotys per annum - and this is a lot less than the pension deficit in Great Britain, France, Germany or Spain.
The average individual pension gap, calculated for Polish workers planning on retiring within the next 40 years, is €3400 or 13,600 zlotys per annum. This means that this is the additional amount which the average person from this group should be saving every year. This deficit is lower than average for people just starting work and higher for people nearing retirement age.
"In publishing this report, we do not want people to worry about their future, but we want to show them the scale of the challenges facing the pensions systems. We want Polish workers, instead of pointlessly worrying about their future retirement, to get used to making regular voluntary savings, even if this is just a small amount. Twenty years in a free market economy has taught Polish workers to be resourceful. It's high time people started thinking about their retirement in the same way," says Maciej Jankowski, chairman of the Aviva group in Poland.
Aviva is not only the pension fund market leader in terms of assets (around 50 billion zlotys), but it is also one of the main players on the voluntary pensions contributions market (with assets estimated at 10 billion zlotys).
The Aviva voluntary pensions contributions offer includes:
- Insurance and investment funds - primarily with regular contributions which encourage customers to invest and which create a culture of saving
- Dedicated savings and investment accounts for individual life insurance
- Investment insurance with a one-off premium
- Group life insurance with an investment programme
- Employment Retirement Programmes (PPE)
- Individual Retirement Accounts (IKE) - the current legal method has too many restrictions which do not balance out the benefits of exemption from capital gains tax (the so-called Polish Belka tax).
Aviva is one of few organisations in Poland which also offers guaranteed capital income. A customer taking out this agreement will only make one capital payment and will then receive guaranteed regular payments for life. In Poland Aviva currently pays out capital income to several hundred people.
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Information:
Bohdan Białorucki, press spokesman
Telephone: (22) 557 43 41; 501 781 140
E-mail: bohdan.bialorucki@aviva.pl
Grzegorz Mathea
Telephone: (22) 557 43 70
E-mail: grzegorz.mathea@aviva.pl
Notes to editors:
Aviva is the sixth insurance group in the world and is the market leader in the United Kingdom. The group operates in 28 countries in Europe, North America and Asia, servicing 53 million clients, achieving annual revenues of £50 billion
and managing assets valued at £380 billion.
Aviva has been operating in Poland since 1992 (up to May 2009 as Commercial Union). It is a pioneer of modern life insurance products and a world leader in terms of retirement funds. It also offers investment products, property insurance for companies and individual customers, group life insurance and employee’s pension plans. It services 3.5 million customers and manages assets valued at around 65 billion zlotys.
Additional information: www.aviva.pl, www.avivainvestors.pl, www.aviva.com.