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Research confirms global ‘retirement savings crisis’: Amundi

Yasmine Raso17 March 2025
Retirement calculator

New research from the Amundi Investment Institute has found a combination of behavioural factors and lack of awareness is behind the ongoing “long diagnosed retirement savings crisis” plaguing several global economies.

The ‘Overcoming barriers to retirement savings’ paper indicated individuals still find it difficult to contribute to their retirement savings due to a variety of factors, such as the complexity of asset allocation and behavioural issues like procrastination.

According to the research, the US’ National Retirement Risk Index shows 39 per cent of working-age households will not be able to continue their current standard of living once they retire; similarly in Europe, 19.8 per cent of those aged 65 years or older – especially women – are at risk of poverty or social exclusion.

The paper’s author, Amundi Investment Institute’s Head of Investor Intelligence & Academic Partnerships Marie Brière, identified tax incentives as an “efficient tool” to promote and encourage contributing to retirement among ‘active’ savers and older, wealthier individuals. Brière also recommended addressing the lack of awareness and activity around retirement savings by promoting educational resources and information.

She also indicated automatic contributions made by employers to their employees’ retirement savings would be much more “effective to support a wider range of individuals to invest on the long term” and mitigate the negative impacts of procrastinating on retirement contributions.

“To address these issues, many countries have introduced reforms to encourage private saving by providing tax incentives for voluntary pension contributions, automatic enrolment in pension plans, or trying to raise awareness about the importance of pension saving through retirement education material,” the report said.

“What are the lessons learned from these reforms and how do the various incentives affect saving? Evidence on the effectiveness of retirement information provision and financial education is mixed. Some experiments show that providing easily accessible information on one’s pension entitlements has a significant impact.

“In Germany, for example, a policy of systematic information on pension entitlements was introduced between 2002 and 2005, with annual letters presenting projected retirement incomes for all individuals over the age of 27. This reform led to an increase in tax-deductible retirement savings and a rise in earned income.

Brière also said in the report that technology-powered tools, such as virtual reality and pension simulators, could help to pique the interests of individuals in their retirement and encourage them to expand their financial literacy – no matter their age.

“Getting people to save and invest for retirement is not an easy task and there are many reasons for that,” Brière said.

“Saving decisions are complicated: people don’t know how much to save, or how to allocate their assets for retirement. The easy solution is to leave the money in their bank account. Present bias and procrastination explain the lack of decisions. In addition, savers like to have access to liquid savings that they can use when needed. However, most retirement saving vehicles lock the money until retirement, unless there are exceptional reasons to withdraw.

“This raises the question of the optimal degree of liquidity offered by retirement savings plans. Tax incentives can have an impact on retirement savings. They tend to have a bigger impact on savers that are already ‘active’ savers or wealthy individuals. Incentivising automatic contributions from employers to retirement savings plans might be more effective to touch a wider audience of potential investors. Finally, the provision of information on retirement saving needs (perhaps combined with engaging ‘virtual reality’ tools) can be useful, especially if it is channelled through financial advisors or easily accessible digital tools such as robo-advisors.”

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