Spain: The volume of contributions to pension plans in Andalucia only represents 0.49% of the GDP of the community

• The average loss of purchasing power after retirement in Andalucia stands at approximately 43%². The province with the greatest loss of purchasing power is Almeria with more than 50%, and the one with the least loss is Cádiz, where pensioners lose approximately 35% of their purchasing power upon retirement.²
• There are more than 843,000 persons approaching retirement age throughout the region.
• Spaniards differ in their level of confidence in the State pension as a major source for financing retirement: for those over 55 years of age it stands at 71%, and for young people between 18 and 34 years of age, 55%.

The volume of contributions to pension plans in Andalucia represents approximately 0.49% of the GDP of the community at current prices, according to calculations made by the Aviva Savings and Pensions Institute from the latest published official figures¹ in Andalucia. The average annual salary amounts to €20,906, and the average annual pension of the region amounts to €11,769. In view of this, the average loss of purchasing power in Andalucia after retirement stands at approximately 43%².

The Aviva Savings and Pensions Institute has carried out pioneering research comparing the motivations and prospects as regards pensions and long-term savings among two very different age groups in Spain: persons over 55 years of age who have not yet entered retirement, and young people aged between 18 and 34 years.

The general directors of the insurance companies Unicorp Vida and CajaGRANADA Vida, both Aviva holding companies, and Unicaja and CajaGRANADA respectively, have assessed the scope of the research in the Andalucia community.

In this way, José Luis Jiménez, director general of Unicorp Vida, highlighted that “the Generations study offers important figures which can be extrapolated to the actual situation of pensions in Andalucia. Within this Community, approximately 843,000 persons approaching pensionable age³, and more than two million young people³, form the analysed group, in whose pensions the conclusions of this research will be reflected”.

On his part, Pedro Moles, director general of CajaGRANADA Vida, considers that “as demonstrated by the motivations and prospects analysed by the Generations study, it is important for citizens in general, both young people of Andalucia and persons approaching pensionable age in the community, to reflect on what will be their economic requirements in the future, and take further savings measures to address them and maintain their standard of living”.

Major conclusions of the “Generations” research: 

Persons “Approaching retirement” (more than 55 years of age and not yet retired)

• 71% of them expect the State pension help them to finance their golden years, which makes it the most common source of financing in the country.
• Four out of every 10 Spaniards believe that they will need 100% of their income to live comfortably in retirement. But three of every 10 don’t know or haven’t thought about the amount of money that would make this possible. 
• Spaniards of this age, as opposed to their peers in all other European countries, are the ones least willing to work beyond retirement age, and they are the ones who attribute the greatest importance to health as a lifestyle priority.

Young people between 18 and 34 years of age

• 55% believe that their main source of retirement financing will come from a State pension, and 37% intend to have private pension plans. 50% believe that the financing will come from other, different forms of savings.
• Almost four out of every 10 of those questioned in Spain believe that they will require 100% of their monthly salary in order to maintain a good standard of living in retirement, whilst six out of every 10 fear that they are not sufficiently capable of saving enough to survive into retirement.
• Young Spaniards of this generation are the most concerned in Europe about their career prospects and the possibility of finding work (59%), according to figures of the study.

Major recommendations of the Aviva Savings and Pensions Institute:

• To facilitate the acquisition of complementary savings products: by means of a full review of tax incentives for pension contributions, and by testing the efficiency of existing plans.
• To generate a framework of action in terms of quality and quantity: by creating a European standard that allows suppliers to demonstrate the quality of their products, facilitate their comparison and enhance consumer confidence. 
• To establish a European pension savings target that could vary according to the country and be calculated as a percentage of the GDP or by means of distribution through the three pillars.
• Collaboration between public and private spheres. 
• To promote a savings culture by improving financial literature and providing an annual consolidated pensions report for all subscribers, giving the man in the street an estimation of what his future benefits will be.

Methodology of the “Generations” study

These figures were obtained from the “Generations” study undertaken by Aviva at The Futures Company in 2010. The Global Monitor study was carried out in seven countries and was complemented with two waves of the CAS (Consumer Attitudes to Savings) developed in five countries. The countries included in the study are: Ireland, France, Italy, Spain, Poland, Turkey* and Russia* (*the latter figures are excluded from the CAS study).

The study analysed the replies of 8,709 participants in two different generation sections in Ireland (1,571), France (1,265), Italy (1,354), Spain (1,522), Poland (1,461), Russia (890) and Turkey (646).

The analysed groups are the Generation AND with ages between 18 and 34 years (6,197 participants), and those Approaching Retirement, over 55 years of age not yet retired (2,512 participants).

¹ Figure taken from the calculation of pension plan contributions of the latest published statistics on taxpayers under the IRPF (Personal Income Tax) scheme (Total 2009, AEAT (Spanish State Tax Administration Agency)) and the figures of the INE (National Statistics Institute) related to the GDP for each Autonomous Community (2009).

² Estimate completed from the figures of the Annual Survey of salary structures (CNAE (National Classification of Economic Activities) 2009), series 2008-2009 of the INE, and the latest published figures on the average monthly pensions of the Ministry of Employment and Immigration.

³ Figure taken from the latest Municipal Register completed by the INE in the year 2010.

Read the full report Generations report PDF (758KB) - note this PDF is in Spanish

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For further information please contact:
Maribel Alonso Francisco
Telephone: +34 91 556 01 54
Email: maribel.alonso@edelman.com

Laura Villuendas
Telephone: +34 912 971 817 / +34 696 576 921
Email: laura.villuendas@aviva.es

Noted to editors:

Aviva is the sixth largest insurance group in the world, and is the leader in the international market of insurance and long-term savings products. In Europe, it leads in the life insurance and pensions market.
 
Aviva in Spain is one of the leaders in the life insurance and pensions sector. It trades its products through professional brokers (Aviva Life Vida and Pensions) and by means of strategic alliances with some of the major Spanish savings funds (Bancaja, Caixa Galicia, Unicaja, Caja España, CajaGRANADA and Cajamurcia) and banks such as Banco de Valencia.  www.aviva.es