A new report released by insurer Aviva calls on the institutions of the EU to support action to raise people’s awareness of how much they stand to receive in retirement.
The latest report in Aviva’s “Mind the Gap” series, called “Towards Annual Pension Statements across the EU” reveals how raising awareness of how much people stand to receive in retirement would encourage them to think about their retirement strategy.
Europe’s €1.9 trillion annual pension gap cannot be reduced with a single solution, however Aviva believes that once a year, every year, adult EU citizens should receive a single statement integrating state, occupational and private pensions of the income they can anticipate receiving in retirement.
Aviva’s research shows that consumers across the region are ignoring the warning signs about the gap between retirement expectations and levels of saving, leaving them financially underprepared for retirement. For example, only 23% of Europe’s 18-34 year olds take an interest in information on personal finance. This group should be encouraged more to increase their interest in saving and their understanding of the choices they need to make to plan for their retirement. Access to information such as annual pension statements designed in a clear, simple and engaging way – is clearly one of the actions required.
Aviva calls on the European Commission to:
Consult on the minimum standards that should apply to annual pension statements - and options for public private partnership working – in its forthcoming Pensions White Paper;
Create forums to share best practice between Member States;
Hold pilot projects to test the impact of pension statements on decision-making and savings habits.
Launching the report at the European Parliament in Brussels, Igal Mayer, Aviva Europe CEO, said: “Changing people’s attitudes to saving and helping them to better understand the financial choices they need to make is an ambition held by Aviva, and it should be a common objective for EU governments too. Yet our research shows that consumers don’t pay enough attention to information on personal finance.”
“Providing annual pension statements would prompt individuals to take action as a result of seeing clearly what they stand to receive in retirement. Aviva’s report demonstrates that the challenges of doing so are not insurmountable and we hope the European Commission will open a pathway towards this public policy goal in its forthcoming Pensions White Paper.”
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