SEB survey: one third of the residents of Estonia are accumulating additional savings for pension
OREANDA-NEWS. More than one half of the residents of Estonia acknowledge the need to set aside additional pension savings in order to complement their 1st and 2nd pension pillars. Close to one third claim that they are already doing so to an extent; however, only 14% are saving an average of EUR 100 per month on a regular basis, the SEB retirement readiness survey revealed.
“Targeted saving for pension ranks last in terms of importance among the financial matters of residents of Estonia, since the working-age population has, naturally, set their priorities on buying a home and putting their children through school; with saving for pension becoming important only as they begin reaching retirement age,” said Indrek Holst, Head of SEB Elu- ja Pensionikindlustus.
The most popular saving option used to supplement the national pension and the 2nd pillar is the 3rd pillar pension fund, in which 24% of the respondents are investing. Close to 20% are saving money in a separate bank account, with the same percentage using a savings deposit.
“The 3rd pension pillar is a flexible opportunity to secure one’s retirement, because the size of the contributions can be determined by its owner and, if necessary, changed. It is also a unique solution when compared to the other popular options, as a 20-percent income tax exemption applies to the contributions and the sum withdrawn for pension also includes tax benefits. Regardless of all this, interest in the voluntary accumulation of supplementary pension remains low. Saving for pension becomes more important only when people reach the second half of their 40s. The survey revealed that among people aged 50-55 there are more people saving for pension on a regular basis than among those who are a decade younger, although monthly savings become smaller as age increases,” added Holst.
* The data cited draws on SEB’s retirement readiness survey, conducted in cooperation with the market research company TNS for the second consecutive year in all three Baltic States. The survey was conducted in October 2015, with a total of 1700 private individuals participating.