According to pan-European research conducted by Allianz in close co-operation with Allianz Global Investors*, many 50 to 70 year olds are uncertain if they can maintain their current standard of living in retirement, and will need to build additional savings to achieve their goals.
The study looked at retirement finance of 1,402 respondents, aged 50-70 years, living across seven European countries: Austria, France, Germany, Italy, Netherlands, Switzerland and the United Kingdom (UK). It found that half are uncertain if they can maintain their standard of living in retirement with many needing to build additional savings to maintain their existing standard of living. The younger respondents tended to have an altogether more pessimistic outlook. This group were particularly concerned about maintaining their standard of living due to the consequences of pension reforms and the impact of the financial crisis on their financial and pension wealth. Only 40% of 50-to-54-year-olds think they will have the same standard of living in retirement. In contrast, 53% of those aged 60-70 are optimistic or already enjoy a relatively comfortable standard of living.
Inflation is cited as the biggest financial risk in retirement in all countries (except Austria). In Germany and UK this is particularly apparent with 60% of Germans and 65% of Britain’s citing inflation as the greatest financial concern to potentially impact their pension. However, when tested on their understanding of the effects of inflation, respondents in the UK and the Netherlands tended to overestimate and Austrians tended to underestimate its impact. French, German and Swiss respondents were most realistic about the effects of inflation.
Despite some people misinterpreting the risk that inflation poses, the research showed the majority of 50+ respondents feel they are well informed about financial matters and use a wide variety of information sources. However, while there is a wealth of information available, what matters to pension savers is its usefulness so that investors can both understand it and know how to act in response to it.
Swiss most satisfied with retirement planning
Nearly two thirds of the respondents said they are satisfied with their retirement planning, only 8% said to be dissatisfied, Swiss respondents are the most satisfied at 81%, with only 2% “dissatisfied”). The overall level of satisfaction with retirement planning is significantly lower in France (46% “satisfied” and 11% “dissatisfied”) and Italy (54% “satisfied” and 14% “dissatisfied”).