It is difficult to buy a solution to a problem that is not perceived as such. Longevity is, in itself, a concept that most non-retired Italians do not associate with positive feelings. Yet over 70% of the same sample have little or no confidence that they will receive a public pension sufficient to maintain their current lifestyle. The solution to bridging the ever-widening gap between retirement income and final salary involves forms of savings that, according to the “Look to the Future” survey conducted by Nomisma for Athora, have already been adopted by the majority of Italians.
But there are many ways to save for retirement, and Italians do not always seem aware of the options available to them. 47% save the old-fashioned way: by cutting expenses and setting aside cash. 27% say they have enrolled in a supplemental pension plan, and 19% have a financial investment plan. Overall, less than 20% of Italians say they are “doing nothing” to save money for retirement—and in over half of these cases, this is due to a lack of resources. When the belt is already tightened, there’s little to be done, but overall the research seems to suggest that for the other half of Italians who aren’t setting aside money for retirement, financial advice could make a difference: people who say it’s too early (20% of those not saving) or who simply don’t worry about it (another 10%).
Pension Fund: Knowing Isn’t Enough
40% of respondents—a sample of 1,200 Italians aged 18 to 75—say they are unaware of or have not considered the open pension fund as a solution to supplement their retirement income (the percentages are similar for the PIP). The most interesting aspect, however, is another: of the 60% who say they know about open-ended pension funds as a solution, only 6% have actually signed up for one. For occupational pension funds, available only to specific categories of workers, 54% are aware of the solution and 11% have signed up for it.
The problem is therefore twofold: it is not just about knowing, but also about knowing and taking action.
The survey, however, does not seem to paint a particularly rosy picture of those savers who are unaware of specific retirement planning tools. Only one in five respondents, among those who stated they were unaware of pension funds and PIPs, said they were very or extremely interested in learning more, compared to 45% who were not very or not at all interested.
Post-hoc regret and the lesson from the over-50s
Those who are already in their later years, however, have a slightly different perspective. Half of those over 50 say they should have thought about their supplemental retirement savings much earlier than they actually did. This sentiment is confirmed by those who are already retired: 20% of retirees admit that, if they could go back, they would plan for retirement much earlier (and 14% would have enrolled in a supplemental pension plan).
“The Observatory’s data paint a picture of an Italy that saves through sacrifice, but struggles to turn those savings into a solid life plan,” stated Jozef Bala, CEO of the insurance company Athora Italia, “We have a duty to communicate that supplemental pension plans are a strategy to mitigate future regret and ensure the peace of mind that, as the research shows, today belongs only to those who were able to plan ahead. That this is the path to follow is clearly demonstrated by the 91% of subscribers to supplemental pension plans who are satisfied with the choice they made.”
