Insurance - - INDUSTRY UPDATES - Source: Al­lianz press re­lease, 14th April

• Gen­er­a­tional con­tract is in­tact though it is an additional bur­den for younger people • Fu­ture per­spec­tive: people in Malaysia con­fi­dent, Ja­panese most pes­simistic • Most young people state they do not have enough money to make pre­cau­tions Money mat­ters: Across the world, people of dif­fer­ent gen­er­a­tions are wor­ried about their fi­nan­cial well­be­ing in re­tire­ment. The ma­jor­ity be­lieves they will have to cut back in their liv­ing stan­dards af­ter re­tire­ment, while con­fi­dence in pub­lic pen­sion schemes is low ac­cord­ing to Se­cu­rity-TrustSol­i­dar­ity, a re­cent sur­vey by Al­lianz In­ter­na­tional Pen­sions for the third Berlin De­mog­ra­phy Fo­rum. This was also the motto of the in­ter­na­tional con­fer­ence, which took place from April 9 un­til April 11. The study Se­cu­rity-Trust-Sol­i­dar­ity ex­am­ines the views on ag­ing and re­tire­ment of both a younger (aged 30–45) and an older (60–75) age group in seven coun­tries at dif­fer­ent stages of de­mo­graphic de­vel­op­ment: Ger­many, France, Italy and the UK from ‘old’ Europe; plus the ‘old­est’ coun­try in the world, Ja­pan; and two ‘younger’ coun­tries, Turkey and Malaysia. The study fo­cuses on the ques­tion how people pre­pare for re­tire­ment and which fac­tors in­flu­ence the in­di­vid­ual sense of se­cu­rity.

Gen­er­a­tions have sim­i­lar views In a time of de­clin­ing birth rates and ris­ing life ex­pectan­cies, so­cial se­cu­rity sys­tems are com­ing un­der in­creas­ing pres­sure. The more el­derly people there are to sup­port, the greater the re­spon­si­bil­ity that rests on the shoul­ders of the younger gen­er­a­tion. But what ef­fects does this have on ev­ery­day lives and in­ter-gen­er­a­tional re­la­tion­ships? Al­though ag­ing is an over­ar­ch­ing topic in all coun­tries, there are sub­stan­tial dif­fer­ences in both the speed and ex­tent of chang­ing de­mo­graph­ics. “What we found

was that re­gional and cul­tural dif­fer­ences have a much higher im­pact on the re­sults than gen­er­a­tional as­pects within a coun­try,” says Brigitte Miksa, Head of Al­lianz In­ter­na­tional Pen­sions. “This was sur­pris­ing to me, as it shows, that the gen­er­a­tional con­tract is in­tact.” The most ob­vi­ous dif­fer­ence be­tween coun­tries is in their view on the fu­ture. In Ja­pan and France, both age groups are pes­simistic. When think­ing about their ex­pec­ta­tions for the next ten years, only 4 per­cent of 30–45-yearolds in Ja­pan were re­spond­ing pos­i­tively. This is in strong con­trast with Malaysia, where roughly 60 per­cent of both gen­er­a­tions feel con­fi­dent about the fu­ture.

Fam­ily and money pro­vide se­cu­rity When asked about which cir­cum­stances in life pro­vide se­cu­rity, ‘hav­ing money or sav­ings’ ranked high­est across both co­horts in Ja­pan (over 65 per­cent of re­sponses) and Malaysia (over 74 per­cent), while in other coun­tries like Turkey and Italy fam­ily is more im­por­tant. In this con­text, it is note­wor­thy that the ma­jor­ity of young par­tic­i­pants in ev­ery coun­try ex­cept Ger­many be­lieve they do not have enough money to make pre­cau­tions for re­tire­ment. 59 per­cent of the young Ja­panese think so, but only 40 per­cent of young Ger­mans. This opin­ion can have a sig­nif­i­cant im­pact as the wide­spread be­lief is that both state and em­ployer pen­sion plans will not pro­vide them with suf­fi­cient funds to live a good life in re­tire­ment. On a more pos­i­tive note, how­ever, these same people know what to do: start sav­ing early. This is par­tic­u­larly rec­og­nized in Malaysia, with a pen­sion sys­tem built mainly on a funded ar­range­ment, but also in Ja­pan, Turkey and Ger­many. “Younger people in France and Italy see sav­ing as less im­por­tant. They don’t seem to have a real­is­tic view on their fu­ture re­tire­ment in­come re­al­i­ties,” Miksa says.

Longer, hap­pier lives? Once in re­tire­ment, many want to re­main ac­tive, ex­press­ing an in­ter­est in vol­un­teer­ing and trav­el­ling. As we live longer, we ex­tend our healthy life ex­pectancy. “The midst of life is get­ting later: in many coun­tries, life ex­pectancy for a 60-year-old to­day is the same as it was for a 50-year-old in the mid­dle of the last century. You could say 60 is the new 50,” the ex­pert com­ments. The ag­ing of so­ci­eties has al­ready re­sulted in a num­ber of pen­sion re­forms to re­duce the bur­den on so­cial se­cu­rity sys­tems. “With this in mind, the lack of con­fi­dence in pub­lic pen­sion sys­tems is un­der­stand­able,” Miksa says. “What is alarm­ing is that people are skep­ti­cal about their abil­ity to fill their gap. Gov­ern­ments have to sys­tem­at­i­cally work on the ef­fi­ciency of additional pro­vi­sion­ing schemes and op­ti­mize the re­tire­ment in­come mix.”

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