This is shown by a current unique research study commissioned by the “Initiative 2050”. The majority of those surveyed do not expect to be able to maintain the desired standard of living in retirement and do not trust the state pension system. Almost a quarter have taken out private provision. Those surveyed also criticize the lack of financial education in school.
This means that their own pension is the second largest worry factor for young people, ahead of war (73 percent), economic development and climate change (70 percent each). Inflation remains in first place, with 85 percent saying that this was “very” or “somewhat” worrying to them. 62 percent do not believe that they can maintain the desired standard of living through the state pension alone. On average, those under 30 expect a pension of 1,393 euros – just below the minimum income – per month.
58 percent distrust the pension system
58 percent express distrust in the state pension system, but only 23 percent have taken out a private supplementary pension. In principle, half of those who have not taken out a private supplementary pension have a positive attitude towards it; the higher the level of education, the more positive it is. 23 percent were undecided. For those surveyed, the main reason against an additional pension was the financial effort; half said they could not afford it at the moment. Among those in their late twenties, the lack of tax incentives is also a counterargument.
The main reason given most frequently for an additional pension was to ensure a standard of living and pension provision, to finance care in retirement and to protect against occupational disability during working life. Those who can imagine it would, on average, be prepared to deposit 104 euros per month. That’s not a high amount, “but it’s a very reasonable amount,” said Heinz Bednar, President of the Association of Austrian Investment Companies VÖIG.
Financial education in school: The higher the education, the more dissatisfied
According to the study, 57 percent feel well or very well informed about money and finances, although only a quarter believe they have learned enough at school. The more highly educated the respondents were, the more dissatisfied they were with financial education at school. 52 percent try to make up for these gaps via the Internet (more men, highly educated people and high earners), 36 percent rely on conversations with family and friends, 22 on the media and 17 on their bank or financial advisor.
The “Initiative 2050” includes all providers of company and private pension provision in Austria. These are the Association of Pension and Provident Funds, the Association of Austrian Insurance Companies (VVO) and the Association of Austrian Investment Companies (VÖIG). For the study, Unique Research surveyed 800 people between the ages of 18 and 30 in Austria. Some of the surveys took place online and some by telephone from February 1st to March 1st.
“Clear mandate for politicians”
For the representatives of the “Initiative 2050”, the results of the study are “a clear mandate for politicians” to improve the framework conditions for private and company pension provision – the second and third pillars in addition to the state pension – emphasized the representatives of the associations. On the one hand, this includes creating tax incentives. The Old Age Security Commission should also deal with “all pillars, not just the first,” said Andreas Zakostelsky, chairman of the Association of Pension and Provident Funds.
A good first step is the new severance pay, “you just can’t take the money out beforehand,” emphasized Andreas Csurda, chairman of the professional group of pension funds. In order to improve financial literacy, financial education should be anchored in curricula.
“Green pensions” are also an issue, says Zakostelsky. As the study shows, more than 40 percent would forego higher returns if their investment was sustainable.
