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Pension returns across EU too low

Retirement fund shortfallThe outlook for European pension savers is bleak in spite of a six-year bull market for European equities and bonds, investor lobby group Better Finance has said.

Europe’s pension savings gap surpasses €2 trillion a year, or around 13% of Europe’s GDP, according to research carried out by Better Finance. The non-governmental organisation (NGO) added that “this is by far the biggest financial issue facing EU citizens, their children, and grandchildren.”

The NGO refutes claims that saving “more and for longer periods” alone will solve the issue, and says that saving 10% of income for a 30-year period will only provide 12% of activity income through retirement.

Better Finance says fees and commissions hit returns for pension savers, with asset allocation and taxes on long-term savings also to blame.

The group published a list of recommendations that it urges EU policymakers to heed to address what it describes as “this most urgent threat to the wellbeing of EU citizens.”

Guillaume Prache, managing director at Better Finance said: “If EU policy makers are at all serious about addressing the ticking pensions time-bomb in Europe, urgent action is needed.”

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