FIDELITY INTERNATIONAL Retirement Eurobarometer Wave 2

Transcription

1 FIDELITY INTERNATIONAL Retirement Eurobarometer Wave 2 Report FIDELITY INTERNATIONAL Ivan MONEME / Sixtine RICHER Contact TNS Sofres : Département Finance Frédéric CHASSAGNE / Fabienne CADENAT / Michaël PERGAMENT / Marie FAITOT / / / KW61 Finance Department

2 2 Contents Methodology How mature are Europeans regarding financial preparation of retirement? Information level and sources Choosing a retirement scheme Perception of existing offer Working out the amount to put aside 13 4 Product related expectations 15 5 Encouraging retirement preparation Via which actors? Via which measures? 21 6 When to start? 24

3 Methodology Fidelity International - European Retirement Barometer wave 2 42KW61 January nd wave of the Retirement Eurobarometer (1st wave in September 2006) conducted by TNS Sofres on behalf of FIDELITY INTERNATIONAL Fieldworks conducted in November and December 2007 amongst active people in 8 European countries Sample : in each country, national representative sample of active people aged 18 + Number of interviews Fieldwork dates Sweden Netherlands Germany Austria Switzerland France Italy Portugal November to 5 December 28 November to 12 December 30 November to 3 December. 4 December to 3 January to 6 December 28 November to 4 December 28 November to 4 December 17 to 21 December NB: Countries are ranked from North to South Significant increases since 2006 indicated in green Significant decreases since 2006 indicated in orange

4 1 How mature are Europeans regarding financial preparation of retirement?

5 5 How many Europeans have started to prepare financially for their retirement? : Overview Split between northern and southern countries remains Northern countries: majority has started to prepare their retirement (7 to 8 out of 10) Southern countries: less than half, down to 1/3 in France and Portugal, have started to prepare No evolution compared to October 2006, except in Italy and Portugal: significant rise of prepared people (even if still around 1/3 of non-goers ) real effect of the new retirement scheme regulation in 2007 in both countries (Italy : progressive disengagement of the state in favour of private pension / Portugal: new calculation method of pension income and progressive increase of the age for retirement) Reminder : Preparers in 2006 Have you started to prepare your retirement financially? (Base: Whole sample) Yes No, but plans to No, and doesn't plan to Don't know 79 % Sweden 81% 11% 6% 2% 71 % Netherlands 68% 19% 9% 4% 77 % Germany 80% 10% 9% 1% 75 % Austria 77% 8% 14% 2% 72 % Switzerland 68% 17% 7% 8% 40 % France 36% 40% 21% 3% 34 % Italy 43% (+9) 19% 31% 7% 25 % Portugal 36% (+11) 31% (+9) 26% (-18) 7%

6 6 How have Europeans started to prepare financially for their retirement? North Last year, only Sweden had a significant proportions of mix preparers, i.e. relying on a personal and an employer scheme in a year s time, Germany and Switzerland have now reach a third of mix preparers Switzerland: same number of preparers in each type of schemes, but increasing number of mix preparers Germany: increasing role of employer schemes (+10 pts in one year) However, it is the opposite in Austria Netherlands : large predominance of employer schemes logically remains Have you started to prepare your retirement financially? (Base: Whole sample) In % Sweden NL Germany Austria Switzerland YES Opened personal scheme Subscribed to scheme via employer PLAN TO Both Both (+10) Both Both Both (-9) (+6) (-7) (+6) 7 Plan to do it in less than a year Plan to do it the coming years NO AND DOESN'T PLAN TO Don't know

7 7 How have Europeans started to prepare financially for their retirement? South Overall, personal schemes still prevails Significant evolutions in Italy and Portugal, each country gaining 9 to 11 points on preparation level Portugal: increase of preparation level mainly due to the development of employer schemes new alternatives offered by employers in the private sector Italy : increase in both personal and employer schemes France: no evolution, hence now behind Italy and Portugal in terms of employer schemes Have you started to prepare your retirement financially? (Base: Whole sample) In % France Italy Portugal YES Opened personal scheme Subscribed to scheme via employer PLAN TO Plan to do it in less than a year Both 1 43 (+ 9) 36 (+11) 30 Both 23 Both (+5) (+5) (+10) Plan to do it the coming years NO AND DOESN'T PLAN TO (-18) Don't know 3 7 7

8 8 How concerned do Europeans feel about retirement? Concern level is more linked to each country's retirement policy than preparation level 2 very concerned countries: Germany and Austria Despite a high preparation level, highest concern levels in Europe (which even gains 5 points in Austria) many retirement reforms in Germany over the past decades and still going on 4 fairly concerned countries : Italy, France, Portugal and Switzerland Italy and France : increased concern level, as the reforms have taken new steps ahead and make it obvious that the state pension system will not be enough 2 averagely concerned countries: Sweden and the Netherlands The lowest concern levels in Europe have even decreased over 1 year: unsurprising, as these 2 countries reformed long ago and have now reached rather stable pension systems (no new reforms recently) How concerned do you feel about financial preparation of your retirement? Would you say you feel Reminder : Have started to prepare 81 % Sweden Total Not concerned 55% 15% 40% 40% 5% (Base: Whole sample) Not concerned at all Not really concerned Fairly concerned Very concerned Total Concerned 45% (-8) Reminder : Concerned % 68 % Netherlands 58% 30% 28% 27% 11% 38% (-7) 45 % 80 % Germany 14% 9% 5% 39% 47% 86% 84 % 77 % Austria 22% 11% 11% 40% 38% 78% (+5) 73 % 68 % Switzerland 38% 14% 24% 41% 20% 61% (-7) 68 % 36 % France 33% 10% 23% 33% 34% 67% (+9) 58 % 43 % Italy 26% 10% 15% 37% 36% 73% (+5) 68 % 36 % Portugal 32% 14% 18% 28% 37% 65% 69 %

9 2 - Information level and sources

10 10 How informed do Europeans feel about financial preparation retirement? The split between Northern and Southern Europe remains Northern countries feel better informed: only exception, as was the case last year: Sweden Southern countries: still a majority who feel poorly informed But progression of information level in the countries where financial preparation of retirement has increased: Italy and Portugal, where people have started to handle themselves How well informed do you feel about financial preparation of your retirement? (Base: Whole sample) Not informed at all Not really informed Fairly well informed Very well informed Total Not informed Total Informed Reminder : Concerned 2006 Sweden 48% 9% 38% 46% 6% 52% 57 % Netherlands 31% 13% 19% 43% 23% 66% 70 % Germany 20% 5% 16% 51% 28% 79% 75 % Austria 23% 9% 14% 49% 27% 76% 73 % Switzerland 30% 6% 24% 46% 22% 68% (-6) 74 % France 57% 18% 39% 33% 9% 41% 45 % Italy 54% 15% 40% 38% 7% 45% (+6) 39 % Portugal 55% 16% 40% 35% 7% 42% (+6) 36 %

11 3 - Choosing a retirement scheme 3.1 Perception of existing offer

12 12 Range of products usually perceived to be unsuitable Too large in Sweden, NL and Germany, and to a lesser extent in Austria and Switzerland simplification is needed Southern countries: split opinions between too large and not large enough How large would you say that the current range of financial retirement products is? (Base: Whole sample) Too large Just large enough Not large enough Don't know Sweden 63% 25% 6% 6% Netherlands 48% 28% 7% 17% Germany 55% 30% 13% 2% Austria 36% 49% 10% 5% Switzerland 32% 51% 10% 7% France 35% 37% 20% 8% Italy 36% 35% 17% 13% Portugal 23% 33% 27% 18%

13 3 - Choosing a retirement scheme 3.2 Working out the amount to put aside

14 14 Working out the amount of money to put aside: usually not goal-driven but depending on current income Generally speaking, preparers who work out the amount of money put aside according to the income they d like to reach when retired, are still a minority (no evolution since last year) In the Netherlands and Sweden, where employers schemes are the most developed and longestablished, a majority of preparers don t work out the amount put aside at all Worth noting: Portugal has known a major evolution with the development of employers schemes; hence, the proportion of preparers who don t work out the amount they put aside has more than doubled in a year How did you work out the amount of money you regularly put aside for your retirement? (Base: started preparing retirement) You didn't really work it out You worked it out in order to reach You worked it out given your current income the income you would like to get when you retire Total worked it out Sweden (n=407) 60% 7% 31% 38% Reminder Netherlands (n=335) 53% 17% 25% 43% 50 Germany (n=411) 30% 20% 49% 69% 71 Austria (n=383) 21% 16% 62% 78% 82 Switzerland (n=372) 29% 18% 50% 68% 73 France (n=197) 35% 10% 55% 65% 65 Italy (n=188) 28% 18% 52% 69% 64 Portugal (n=198) 47% 7% 41% (-21) 48% (-22) 70

15 4 Product related expectations

16 16 Throughout Europe, clear preference for risk-free products The Swedes are still slightly more prone to risk taking probably more used to it as their system already includes a capitalisation element which can be invested in one of the 450 available pension funds To financially prepare your retirement, would you prefer a financial retirement product that (Base: Whole sample) low return on investment and little financial risk high return on investment and high financial risk DK Sweden 62% 28% 11% Netherlands 72% 13% 15% Germany 80% 16% 4% Austria 81% 9% 11% Switzerland 74% 15% 12% France 85% 10% 5% Italy 77% 12% 12% Portugal 60% 18% 22%

17 17 and secure fixed income A fixed guaranteed monthly income is preferred to other more fructuous but also more short- or middle-term options And once retired, would you prefer to receive (Base: Whole sample) a lump sum a fixed guaranteed monthly income for life a monthly income that will be higher but for a fixed number of years Don't know Sweden 19% 60% 19% 2% Netherlands 18% 68% 8% 6% Germany 28% 68% 4% 1% Austria 33% 54% 9% 5% Switzerland 29% 53% 9% 8% France 19% 68% 11% 2% Italy 27% 60% 6% 7% Portugal 15% 63% 12% 10%

18 5 Encouraging retirement preparation 5.1 via which actors?

19 19 Institutional actors activity level in helping people to financially prepare for their retirement : reality isn t felt to meet expectations (1/2) In all European countries, the State is expected to be one of the most active actors to help people to financially prepare for their retirement, but it is actually felt to be one of the least active at the moment Employers are also usually expected to be one of the 2 most active actors to help people (except in Austria, where they rank 3rd), and could actually do more than they do today Financial institutions, on the other hand, are felt to be the most active, even more than expected Finally, the media are felt to be one of the most active actors, while they always rank last expectation-wise How active would you say each of the following actors currently is in helping people to financially prepare for retirement? (Very active, Fairly active, Not really active, Not active at all) And how active do you think each of these actors should actually be in helping people to financially prepare for retirement? Please rank these 4 actors by starting by the one who you think should be the most active, then the next one and so on. (Base: Whole sample) Should be active Average rank Sweden Is active % Rank 1.8 State 41 % Employers 24 % Financial inst. 87% Media 64 % 2 Should be active Average rank NL Is active % Rank 1.8 Employers 55 % State 36 % Financial inst. 71% Media 58 % 2 Should be active Average rank Germany Is active % Rank 2.2 Employers 45 % State 46 % Financial inst. 83% Media 64 % 2 Should be active Average rank Austria Is active % Rank Should be active Average rank Switzerland Is active % Rank Germany : all actors are expected to be very active 1.9 State 34 % Financial inst. 84% Employers 28 % Media 64 % Employers 50 % State 37 % Financial inst. 77% Media 50 % 2

20 20 Institutional actors activity level in helping people to financially prepare for their retirement : reality isn t felt to meet expectations (2/2) In all European countries, the State is expected to be one of the most active actors to help people to financially prepare for their retirement, but it is actually felt to be one of the least active at the moment Employers are also usually expected to be one of the 2 most active actors to help people (except in Austria, where they rank 3rd), and could actually do more than they do today Financial institutions, on the other hand, are felt to be the most active, even more than expected Finally, the media are felt to be one of the most active actors, while they always rank last expectation-wise How active would you say each of the following actors currently is in helping people to financially prepare for retirement? (Very active, Fairly active, Not really active, Not active at all) And how active do you think each of these actors should actually be in helping people to financially prepare for retirement? Please rank these 4 actors by starting by the one who you think should be the most active, then the next one and so on. (Base: Whole sample) Should be active France Is active Should be active Italy Is active Should be active Portugal Is active Average rank % Rank Average rank % Rank Average rank % Rank 2.2 Employers 23 % State 32 % Financial inst. 70% Media 47 % State 30 % Employers 34 % Financial inst. 58% Media 49 % State 23 % Employers 28 % Financial inst. 69% Media 63 % 2 France : almost all actors are expected to be very active Italy : strong expectations toward the State

21 5 Encouraging retirement preparation 5.2 via which measures?

22 22 We submitted the interviewees a list of 4 measures that could be taken in order to encourage people to financially prepare for their retirement Inform, educate on financial preparation of retirement Develop retirement schemes offered by employers Offer tax savings for those who prepare for their retirement Develop new retirement preparation products In all countries, a vast majority feel all these measures would be useful but which ones would be crucial, essential, according to Europeans?

23 23 Essential measures to encourage people toward retirement preparation Quite logically, needs vary from one country to another, as strongly linked with national retirement situation, policy and reforms However, a constant important leverage across Europe : information and financial education Then come either employer schemes or tax savings On average, Europeans qualify 2 measures as essential, and developing new retirement products doesn t appear to be a priority, except in Germany and Portugal, where basically a stronger need is expressed (larger average number of essential measures) I m now going to read out a list of measures that could be taken in order to encourage people to financially prepare for their retirement. For each of them, please tell me whether you feel it is essential, useful but not essential, or secondary. (Base: Whole sample) Sweden 1 Inform, educate 56 % 2 Employer schemes 48 % 3 Tax savings 45% 4 New retirement products 29 % On average, 1.8 essential measures Austria 1 Employer schemes 64 % 2 Inform, educate 61 % 3 Tax savings 41% 4 New retirement products 40 % On average, 2.1 essential measures France 1 Inform, educate 65 % 2 Tax savings 52% 3 Employer schemes 49 % 4 New retirement products 33 % On average, 2 essential measures % Essential measure NL 1 Employer schemes 51 % 2 Inform, educate 44 % 3 Tax savings 39% 4 New retirement products 21 % On average, 1.6 essential measures Switzerland 1 Tax savings 54% 2 Inform, educate 51 % 3 Employer schemes 36 % 4 New retirement products 24 % On average, 1.7 essential measures Italy 1 Inform, educate 65 % 2 Tax savings 59% 3 Employer schemes 40 % 4 New retirement products 35 % On average, 2 essential measures Germany 1 Inform, educate 74 % 2 Tax savings 67% 3 New retirement products 52 % 4 Employer schemes 45 % On average, 2.4 essential measures Portugal 1 Inform, educate 71 % 2 Employer schemes 64 % 3 New retirement products 46 % 4 Tax savings 45% On average, 2.3 essential measures Germany and Portugal : 2 countries where the results show a stronger need for help and measures, but for different reasons : Germany : flooded with reforms over the past decades Portugal : major new reform in 2007

24 6 - When to start?

25 25 North Europeans feel one should start saving as soon as possible, and they do! On average, all Europeans feel that one should start saving retirement before 35 years old Much younger in Northern Europe: before 30 years old and even as soon as 23 in Germany Rather realistic view as proportion of those who feel one should start preparing retirement before 35 roughly in line with the actual proportion of preparers aged less than 35 years old One exception: the Netherlands, due to the large development of employers schemes According to you, at what age should one start putting some money aside for one s retirement? (Base: Whole sample) In % Sweden NL Germany Austria Switzerland Less than 25 yo yo 34 yo yo 44 yo yo and more Average age Actual % of preparers amongst those less than 35 76% 53% 78% 75% 60%

26 while more discrepancy is shown in South Europe Fidelity International - European Retirement Barometer wave 2 42KW61 January Still a long way to go to reach «ideal» time (especially in France and Portugal), as while about a half feel one should start saving for retirement before 35, only ¼ to 40% of actual preparers are less than 35 According to you, at what age should one start putting some money aside for one s retirement? (Base: Whole sample) In % France Italy Portugal Less than 25 yo 25 yo 34 yo yo 44 yo yo and more Average age Actual % of preparers amongst those less than % 40% 29%