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Most Swiss withdraw pensions as lump sum

Second pillar, pension or capital? Most think both
Second pillar, pension or capital? Most think both Keystone-SDA

For the first time, most Swiss residents favour withdrawing their pension pot as a lump-sum over regular annuity payments.

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Currently the most popular solution – at least theoretically – is a combination of the two approaches, according to a survey conducted on behalf of the financial services provider VZ VermögensZentrum.

Of the sample of 1,200 people (workers and pensioners) questioned in German-speaking Switzerland alone between 20 January and 28 February, 27% said they preferred annuity only, 33% capital only, and 40% a mix of the two.

Influencing the choice of lump sum only are the possibility of investing the money independently (54%), the desire to leave something to heirs (17%), financial considerations such as taxes (8%) and health (8%).

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Those who opt for the combination value above all the security of income (35%).

VZ also points out, however, that an analysis of what actually happens at retirement shows a somewhat different picture: according to data from the Federal Statistical Office (FSO), 41% of pensioners in 2023 (latest available data) chose lump sum, 40% chose annuity and 19% chose a combination.

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This is the first time that the total withdrawal form has won out over the annuity; this had never happened in the past – in 2015 the annuity choice was 50%.

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“The main reason for the increase in capital withdrawals is probably to be found in the reduction of conversion rates,” say VZ specialists.

The FSO data also show that more and more people value the flexibility of being able to freely dispose of their capital. Tax aspects do not seem to play a predominant role in the choice.

VZ VermögensZentrum belongs to VZ Holding, a financial company that is also present in Lugano. The company is listed on the stock exchange and has 1,700 employees.

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Translated from Italian by DeepL/mga

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