European end investors less confident about future retirement income

A third of respondents cite a lack of financial education and understanding of ways to save for retirement, research by Fundamental Media finds

Key points:

• European end investors mostly save for unplanned expenses, to prepare for retirement and to receive higher returns than from cash savings
• Nearly half of respondents are confident they will have enough income when they retire, while 28% thinks they are not saving enough for retirement
• When asked about what is holding them back from saving more, 36% indicated their current income is too low

Preparing for retirement is one of the main reasons why European end investors invest, but only half of all respondents are confident they will have enough income when they retire, research by Fundamental Media found. This is in great contrast with our 2018 research.

For our European end investor research, we surveyed 4,390 end investors across Germany, the UK, Italy and France. Questions focused on end investors’ views on various investment products, saving for retirement and ESG as well as their investing behaviour, how they pick their investments and their media usage.

European end investors mostly save for unplanned expenses (74%), to prepare for retirement (73%) and to receive higher returns than from cash savings (71%). At 88%, Germany has the highest percentage of end investors who are saving for retirement as well as the highest percentage of respondents saving for unplanned expenses (79%). The UK is the only country surveyed where the top reason to invest is to receive higher returns than from cash savings.

Nearly half of respondents (49%) are confident they will have enough income when they retire. This is significantly lower than in our 2018 research, when 63% was confident about their future retirement income. Although the 2018 figure only includes German, Italian and UK responses because the question was not asked in France that year, the trend is similar across all markets and overall confidence has clearly declined.

In the 2022 research, 28% thinks they are not saving enough for retirement, while a further 13% is unsure and would like to receive more advice on this issue, and 8% is not yet thinking about their retirement. These figures are roughly the same across all four markets surveyed. Overall, the level of confidence decreased compared to 2018, with more respondents thinking they are not saving enough and more investors in need of more information about this topic. When looking at the opinions across the various countries, age groups, income groups and wealth brackets, we do learn that a comprehensive distribution strategy requires asset managers to look deeper into the different groups.

When asked about what is holding them back from saving more, 36% indicated their current income is too low. This was followed by 25% stating they need to look after their family and 24% saying they don’t want to sacrifice their current spending. However, there also seems an opportunity for the financial sector to provide more information and educational materials, as 16% indicated a lack of financial education and 15% said they don’t know enough about opportunities to save for retirement.

For Italian end investors the main reason for not saving more was the need to look after family and not wanting to sacrifice current spending. The impact of the current economic situation is particularly visible in the UK and Germany where there was a clear shift in respondents’ priorities from not wanting to sacrifice current spending in 2018 to not having enough income to save more in 2022.

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