Michael Heise: Allianz wanted to find out to what extent the Germans, French, Italians and Spanish believe life aims, satisfaction with life and financial planning are interlinked. We also wanted to find out what makes people satisfied with life, what importance they attach to achieving individual life aims and how likely they think it is that they will achieve those aims.
Our first study of this kind was carried out in Germany in 2004. However, as a financial service provider with Europe as our core market, we felt it was high time to explore these questions on a European basis.
Chief Economist Heise: "People need more financial freedom"
Allianz.com News interviewed Chief Economist Michael Heise about the "Life Aims" of the Germans, French, Italians and Spanish. Allianz commissioned the Nuremburg-based consumer research company GfK to carry out a study in these countries of people's life aims, satisfaction with life and financial planning.
Michael Heise: "Money makes people happy, only to a certain extent"
Allianz.com News: What was the objective of this new study?
? And what did the study reveal?
Heise: Due to their diverse cultural backgrounds, people in these countries prioritize their life aims differently. While in Germany and Italy having a good education is the most important life aim, for the French having children and enjoying life right now are the most important things. The Spaniards, by contrast, want to live healthily more than anything else.
Yet the way in which life aims are prioritized depends not only on a country's culture, but also on its economic situation. The Spaniards, for example, are more satisfied with their lives than respondents in the other three countries. In Spain, the standard of living is improving, which is part of the reason why people there are generally very satisfied with life.
However, Spanish people are not yet aware of the financial pressure of demographic change, not least because this has not been discussed in the political arena for nearly so long as it has been in Germany, for example.
Yet the way in which life aims are prioritized depends not only on a country's culture, but also on its economic situation. The Spaniards, for example, are more satisfied with their lives than respondents in the other three countries. In Spain, the standard of living is improving, which is part of the reason why people there are generally very satisfied with life.
However, Spanish people are not yet aware of the financial pressure of demographic change, not least because this has not been discussed in the political arena for nearly so long as it has been in Germany, for example.
? What features did the countries have in common?
Heise: The study also revealed similarities, for example regarding old age provision. Respondents from all four countries agreed that the greatest discrepancy between desire and reality concerned their financial security for the future and old age.
All respondents said that it was the life aim "financial security for their own future and old age" which made them feel most uneasy. If they analyze how satisfied they are with life right now, they recognize that they have not yet done enough to achieve this aim. Only 33 percent of Germans believe that they will be well provided for in their future and old age. However, this figure falls to 26 percent in Spain, 20 percent in Italy and 17 percent in France.
All respondents said that it was the life aim "financial security for their own future and old age" which made them feel most uneasy. If they analyze how satisfied they are with life right now, they recognize that they have not yet done enough to achieve this aim. Only 33 percent of Germans believe that they will be well provided for in their future and old age. However, this figure falls to 26 percent in Spain, 20 percent in Italy and 17 percent in France.
? Does money make people happy?
Heise: Only to a certain extent. The surveys show that personal happiness and satisfaction with life are not only dependent on the achievement of financial goals, but also on other objectives like self-fulfillment and career development.
According to our study, people with young families are the most satisfied, although they generally have little disposable income. However, when we look carefully at this group we can see that the extent to which they have planned their finances has clearly influenced the achievement of their life aims and thus their satisfaction.
According to our study, people with young families are the most satisfied, although they generally have little disposable income. However, when we look carefully at this group we can see that the extent to which they have planned their finances has clearly influenced the achievement of their life aims and thus their satisfaction.
? In your opinion, what must politicians do to help people achieve their life aims?
Heise: Politicians should not want to regulate too much. Instead, they should work towards creating the necessary framework. This is why further and sustainable reform as well as the stabilization of the social security system are increasingly coming to the fore.
We are running out of time, given that reform in these areas are slow to show effect. Due to our demographic situation we have only around 15 years to relieve the state pension system and build up the necessary capital stock. The later we start to do this, the heavier the burden will be, above all on young people and future generations.
Politicians must therefore continue to encourage people to take responsibility for setting up their own personal provision plans for the future and, most importantly, give them the necessary financial freedom to do this.
Switzerland and the Netherlands succeeded in making old-age provision secured by capital stock a mainstay of their social security systems early on. They have achieved a balance between state pensions financed by contributions and private or company pensions secured by capital stock, (42:58 in Switzerland and 50:50 in the Netherlands).
In Germany, where the current ratio is approximately 85:15, it is crucial that we also achieve this balance. This is demanded of us all: both the state and its citizens.
We are running out of time, given that reform in these areas are slow to show effect. Due to our demographic situation we have only around 15 years to relieve the state pension system and build up the necessary capital stock. The later we start to do this, the heavier the burden will be, above all on young people and future generations.
Politicians must therefore continue to encourage people to take responsibility for setting up their own personal provision plans for the future and, most importantly, give them the necessary financial freedom to do this.
Switzerland and the Netherlands succeeded in making old-age provision secured by capital stock a mainstay of their social security systems early on. They have achieved a balance between state pensions financed by contributions and private or company pensions secured by capital stock, (42:58 in Switzerland and 50:50 in the Netherlands).
In Germany, where the current ratio is approximately 85:15, it is crucial that we also achieve this balance. This is demanded of us all: both the state and its citizens.
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