SEB survey: future pensioners looking to alternatives to state pensions

The SEB Retirement Readiness Survey has revealed that the residents of Estonia, Latvia and Lithuania are looking to alternatives to state pensions, that is, to other sources of income for their old age. Continuing to work after reaching retirement age is seen as the main option, with additional income expected from entrepreneurship or real estate.

Residents of the Baltic States believe that they will continue to work after reaching retirement age. This belief is held by 79% of the respondents in Estonia, 77% in Latvia, and 70% in Lithuania. Almost half the residents in Lithuania consider it likely that in their retirement they will be supported financially by those closest to them. For Latvia and Estonia, this indicator is 44% and 40%, respectively.

The working age residents of Estonia are also hoping to receive income from a personal business or real estate in their old age. Earning additional income from one’s company or its shares is considered a possibility by 46% of the respondents in Estonia, 38% in Latvia, and 32% in Lithuania. Earning an income from renting out or selling real estate is considered a possibility by 40% of the respondents in Estonia, 29% in Latvia, and 27% in Lithuania.

“To an extent, such expectations match the reality for current pensioners, since every other person now aged 62 to 63 in Estonia is earning an additional income by working. However, just 6% are receiving additional funds from their companies and 1% from renting out or selling residential premises. This clearly indicates that the bets placed by the residents of Estonia on business and real estate as potential income alternatives in their retirement are too high,” commented Indrek Holst, Chairman of the Management Board at SEB Elu- ja Pensionikindlustus.

You should start providing for your retirement early

Nearly two-thirds of the residents of Estonia hoping for income from their savings or assets have already begun to save money. The first steps in this direction have been taken by 58% of the respondents in Latvia and 54% in Lithuania.

“Young people see a number of different opportunities to increase their incomes in their retirement. Yet as age rises, income from alternative sources is considered less likely, with people saving for their retirement in an increasingly targeted manner, as indicated by the survey. By then, however, there is usually little time left to save for one’s desired pension supplement, or else higher amounts have to be saved. Holst summed up the subject by stating that “it makes sense to start saving early”.

* 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.

For more information:

Maarja Gavronski
Project Manager for Communication
Marketing and Communications Division
SEB Pank

Phone +372 665 5270
Mobile +372 5656 5785
Address Tornimäe 2, 15010 Tallinn
E-mail maarja.gavronski@seb.ee
www.seb.ee

Read our news feed on Twitter www.twitter.com/SEB_Eesti
Follow us on Facebook www.facebook.com/seb.eesti
View the video archive on YouTube www.youtube.com/user/sebeestivideo