Swiss doubt they can makes ends meet in old age

Old age pension: scepticism among the working population, study Keystone-SDA

Two fifths of the Swiss working population have doubts about their ability to maintain their standard of living once they reach retirement age.

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This pessimism contrasts with a much more optimistic view of people already in retirement, according to a study commissioned by Swiss Life.

Only 42% of people of working age interviewed for the survey are confident about their ability to maintain their standard of living once they retire. A majority of 55% believe that it is very likely that they will not achieve any of the main financial goals they had set for life after leaving the labour market.

Numerous changes would be needed to regain confidence. According to the survey, this would require a decrease in the cost of living (for 41% of those polled), a reduction in healthcare costs after retirement (38%) or an improvement in wage trends (33%).

The pessimism expressed by the working population contrasts with the opinion of those currently retired: 71% of the latter say they have managed to maintain their standard of living even after retirement.

Methodology

The study is based on a survey and data from the Federal Statistical Office (including the Survey on Income and Living Conditions and the Household Budget Survey) and other public sources such as the EU Statistical Office, the Swiss National Bank and the State Secretariat for Economic Affairs.

The survey was conducted online by the market research institute ValueQuest in May. It covered 3,539 ‘linguistically assimilated’ persons aged between 18 and 80 from German-speaking Switzerland, French-speaking Switzerland and Ticino. The margin of error of the survey, which was deemed representative, is 1.65 percentage points for the sample as a whole (the value increases for smaller sub-samples), the report published this morning states.

The work, available in German and French, entitled Panorama Pensions Switzerland, “is one of the most comprehensive studies on pensions in the country”, Andreas Christen, head of research in this area at Swiss Life, is quoted as saying in a note.

Slight deterioration

The study itself is not limited to retirement provision, but analyses various aspects of the financial situation of the Swiss. Of the types of household surveyed, retired couples are the most satisfied financially (72%; the study does not indicate either sample size or margin of error); single-parent households of working age are the least satisfied (32%).

When asked about changes in the financial situation of the household compared to the previous year, 38% of the respondents report a – mostly slight – worsening. 17% perceive an improvement, while 45% notice no change. The main reasons cited for a worsening are the increase in health insurance premiums (51%) and the increase in the cost of consumer goods and services (35%).

Only one in two invests

Some 62% of the working-age population manages to put money aside, a proportion that has remained more or less stable over the past ten years. Some 51% of people say they own shares, bonds and/or funds with mixed asset classes as free assets.

Depending on the population group, there are considerable differences: men (61%) own financial investments more often than women (41%); the same applies to people with higher assets or in-depth financial knowledge.

“Overall, we estimate that people between the ages of 18 and 80 in Switzerland have invested an average of 17% of their assets (excluding real estate) in equities,” Christen is quoted as saying in the statement. Those who do not invest mainly cite a lack of knowledge or time (53%). Further reasons are too few assets or lack of liquidity (44%) as well as the perception that shares are too risky (30%).

Limited pension knowledge

Some 58% of the entire sample rated their knowledge of pensions and investments as good overall. However, only 17% feel that schools prepare them sufficiently on these topics.

Concepts such as ‘three-pillar system’ and ‘OASI/first pillar’ are well understood by 67% and 64% of all respondents respectively. More specific terms such as ‘co-ordination amount’ (most often designated as ‘co-ordination deduction’, 22%) or ‘conversion rate’ (31%) clearly create more difficulties in understanding.

Translated from Italian by DeepL/mga

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