Fannie Wurtz

As retirement planning takes center stage, advisory and financial education are more important than ever according to Amundi’s global study.

• While personal savings become the main expected source of retirement income, only 23% of investors feel very confident about their long term financial security.
• Nearly half of savers expect to start investing within the next 12 months, but just as many remain held back by the fear of losing money and continue to sit on excess cash rather than entering markets.
• One in four retail investors consider themselves beginners. And among those who describe themselves as confident or expert, seven in ten have limited financial literacy.
• Professional advice, sought by 60% of investors, remains central and is being complemented by new practices: 70% of investors use AI to help inform their investment decisions, and nearly one in two seek information via influencers.

Amundi, Europe’s largest asset manager, has released the results of the third edition of its Decoding Investors study, focused on retail investors and savers. Conducted in 26 countries among 18,000 respondents, the study analyses their objectives, fears, behaviours and sources of investment information

The 2026 edition shows that retirement sits at the centre of investors’ concerns, but that many lack the confidence and knowledge needed to turn savings into long-term investment plans.

The key findings are:

Funding retirement: a clear priority, but with a gap between intent and confidence

Personal savings and investments are now the largest expected source of retirement income, with investors hoping they will fund 42% of their retirement pot, ahead of state provision and workplace pensions. This is higher in Asia with investors across the region expecting to fund more than 50% of their retirement from personal savings and investments.

Despite this, only 36% of investors cite retirement (34% in Europe vs 40% in Asia) as a key motivation for investing, and of those, just 23% feel very confident of achieving long-term financial security versus 26% a year before. This highlights a clear gap between the importance investors attach to retirement and their ability and confidence in being able to fund it.

Professional advice makes a significant difference to how confident investors feel about retirement: half of advised investors say they are very confident about funding their retirement, compared with just 14% among those who have never accessed advice.

The confidence gap is keeping savers in cash

The study shows that nearly half (43%) of savers expect to start investing within the next 12 months (a figure that rises to 62% among 21-30-year-olds), but 39% are still held back by the fear of losing money.
The intention to invest varies considerably by country: Danish savers lead the way (79%), followed by Singaporeans (73%), while Belgians and Germans are the least likely to show interest in taking the leap (24%).

In practice, this often means staying in cash for longer than necessary rather than participating in capital markets: for a majority (52%) of savers an emergency fund of less than six months of income is enough to buffer for unexpected expenses, yet, most are holding far more cash.

Financial literacy: belief vs reality

Beyond confidence, financial literacy also plays a crucial role. The study highlights a stark contrast between investors’ confidence and their actual level of financial knowledge: 70% of those who describe themselves as “experts” failed to answer three basic financial literacy questions correctly.

The pattern is most pronounced at the top of the wealth ladder. High-net-worth investors, while the most confident, had the lowest literacy rates, with only 36% answering all three financial literacy questions correctly. However, they are also the most likely to seek advice from professional advisers (87%), versus 58% among retail investors.

AI and social media usage are rising, but professional advice remains essential

In just one year, regular use of AI assistants as a source of investment ideas or information grew four-fold in 2026 to reach 19%.

Most strikingly, seven in ten investors have previously used AI to help them make investment decisions. More than half of them (59%) have acted on its recommendations, and almost all of them (90%) say they are satisfied with the outcome.

But investors are also turning to social media: nearly one in two investors (46%) seek investment information via influencers. This is particularly the case in India (68%) and Brazil (65%), while European countries such as France (28%), Spain (37%) and Germany (40%) remain behind.

These new sources of information do not replace professional advice, they rather complement it by helping investors confirm ideas or validate recommendations. More than 60% of investors claim to have access to at least some professional financial advice, which is increasingly delivered through digital means, with 59% of respondents now receiving all or part of their advice online.

Fannie Wurtz, Amundi’s Deputy General Manager, Head of Clients Group notes, “While funding retirement becomes a central concern for households globally, the third edition of our Decoding Investors study highlights a pressing challenge: helping more savers become investors and enter capital markets.

“For our industry, this means strengthening trust, improving access to investor education notably through digital channels and offering simple, transparent and accessible solutions. Drawing on its expertise, Amundi supports its clients in meeting this challenge through investment solutions, technology tools and support tailored to the long-term needs of saving.”

Read the report.

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Fannie Wurtz

Amundi, Europe’s largest asset manager, has released the results of the third edition of its Decoding Investors study, focused on retail investors and savers. Conducted in 26 countries among 18,000 respondents, the study analyses their objectives, fears, behaviours and sources of investment information.

The 2026 edition shows that retirement sits at the centre of investors’ concerns, but that many lack the confidence and knowledge needed to turn savings into long-term investment plans.

The key findings are:

Funding retirement: a clear priority, but with a gap between intent and confidence

Personal savings and investments are now the largest expected source of retirement income, with investors hoping they will fund 42% of their retirement pot, ahead of state provision and workplace pensions. This is higher in Asia with investors across the region expecting to fund more than 50% of their retirement from personal savings and investments.

Despite this, only 36% of investors cite retirement (34% in Europe vs 40% in Asia) as a key motivation for investing, and of those, just 23% feel very confident of achieving long-term financial security versus 26% a year before. This highlights a clear gap between the importance investors attach to retirement and their ability and confidence in being able to fund it.

Professional advice makes a significant difference to how confident investors feel about retirement: half of advised investors say they are very confident about funding their retirement, compared with just 14% among those who have never accessed advice.

The confidence gap is keeping savers in cash

The study shows that nearly half (43%) of savers expect to start investing within the next 12 months (a figure that rises to 62% among 21-30-year-olds), but 39% are still held back by the fear of losing money.

The intention to invest varies considerably by country: Danish savers lead the way (79%), followed by Singaporeans (73%), while Belgians and Germans are the least likely to show interest in taking the leap (24%).

In practice, this often means staying in cash for longer than necessary rather than participating in capital markets: for a majority (52%) of savers an emergency fund of less than six months of income is enough to buffer for unexpected expenses, yet, most are holding far more cash.

Financial literacy: belief vs reality

Beyond confidence, financial literacy also plays a crucial role. The study highlights a stark contrast between investors’ confidence and their actual level of financial knowledge: 70% of those who describe themselves as “experts” failed to answer three basic financial literacy questions correctly.

The pattern is most pronounced at the top of the wealth ladder. High-net-worth investors, while the most confident, had the lowest literacy rates, with only 36% answering all three financial literacy questions correctly. However, they are also the most likely to seek advice from professional advisers (87%), versus 58% among retail investors.

AI and social media usage are rising, but professional advice remains essential

In just one year, regular use of AI assistants as a source of investment ideas or information grew four-fold in 2026 to reach 19%.

Most strikingly, seven in ten investors have previously used AI to help them make investment decisions. More than half of them (59%) have acted on its recommendations, and almost all of them (90%) say they are satisfied with the outcome.

But investors are also turning to social media: nearly one in two investors (46%) seek investment information via influencers. This is particularly the case in India (68%) and Brazil (65%), while European countries such as France (28%), Spain (37%) and Germany (40%) remain behind.

These new sources of information do not replace professional advice, they rather complement it by helping investors confirm ideas or validate recommendations. More than 60% of investors claim to have access to at least some professional financial advice, which is increasingly delivered through digital means, with 59% of respondents now receiving all or part of their advice online.

Fannie Wurtz, Amundi’s Deputy General Manager, Head of Clients Group notes, “While funding retirement becomes a central concern for households globally, the third edition of our Decoding Investors study highlights a pressing challenge: helping more savers become investors and enter capital markets.

“For our industry, this means strengthening trust, improving access to investor education notably through digital channels and offering simple, transparent and accessible solutions. Drawing on its expertise, Amundi supports its clients in meeting this challenge through investment solutions, technology tools and support tailored to the long-term needs of saving.”

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Since the beginning of the year, Amundi has reinforced its Asia investment hub through the relocation and appointments of key investment leaders to the region.

This includes John O’Toole who is a cornerstone of this initiative, as the newly appointed Chief Investment Officer, Asia while also retaining his current global responsibilities as Global Head & CIO of Amundi’s Solutions platform. John will be based in Hong Kong.

Alongside John’s appointment, several other senior investment professionals have taken on senior roles in Asia:

• Andriy Boychuck, Global Deputy Head of Emerging Markets Fixed Income, is based in Singapore since May 2026.
• Ray Jian has been named Head of Fixed Income North Asia and Head of Emerging Markets Debt Aggregate Strategies, based in Hong Kong, in July 2026.
• Nick McConway, Head of Emerging Markets Equities, Asia, will relocate to Singapore in September 2026.
• Siddharth Sanghvi is appointed Emerging Markets Equity Senior Portfolio Manager, based in Singapore in September 2026.

These appointments reinforce Amundi’s commitment to clients across the APAC region.

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Gold prices were muted late last week, pressured by a stronger dollar and a subdued mood on Wall Street.

“Gold has undergone a meaningful sell-off in recent weeks, but we believe the move has been driven more by a repricing of short-term macro fears than by any deterioration in the metal’s medium-term fundamentals. In our view, the market has largely been recalibrating expectations around a 2022-style scenario: a sharp inflationary shock, an aggressive central bank response, and a sustained rise in both nominal and real interest rates. That framework, however, does not fully reflect the current environment,” says Lorenzo Portelli, Head of Cross Asset Strategy, Head of Research at Amundi Italy, Amundi Investment Institute.

The recent correction was amplified by technical factors. In particular, the unwinding of ETF positions accumulated by retail investors and CTAs in March exacerbated the downside move and added momentum to the decline. As often happens in crowded trades, once prices began to reverse, the selling pressure became self-reinforcing. Yet this type of move typically says more about positioning than about a lasting shift in the fundamental outlook.

“We do not believe the current economic backdrop is comparable to the one that prevailed four years ago. At that time, massive fiscal support across several regions, combined with post-pandemic supply disruptions, led to a sharp acceleration in core inflation well above central bank targets. That forced monetary authorities to react aggressively in order to anchor long-term inflation expectations.

“Today, the picture looks different. Core inflation remains more subdued and better contained, reducing the need for central banks to pursue an even more hawkish stance. In our view, the inflationary impulse triggered by the energy shock is likely to prove temporary rather than persistent.

“Looking ahead over the next 12 months, we remain constructive on gold and see potential for prices to move toward $5,500,” he says.

“Our positive outlook is based on several structural supports. First, central bank demand is likely to remain strong, especially among emerging market authorities that continue to diversify reserves away from traditional currencies. We do not see this trend reversing anytime soon. Gold remains a strategic asset for reserve managers seeking to reduce dependency on the US dollar and enhance portfolio resilience.

“Second, mine supply is unlikely to keep pace with long-term demand trends. Structural supply constraints should continue to limit growth in new production, while official sector buying remains an important source of support. Third, rising global debt levels are becoming an increasingly important backdrop for gold. Ballooning sovereign and private leverage reinforces the appeal of hard assets and strengthens gold’s role as a store of value.

“In the near term, some central banks may choose to use part of their gold holdings tactically to defend their currencies amid heightened volatility, including risks stemming from geopolitical tensions in the Middle East. While such actions are possible, they should not be interpreted as a sign of a structural shift away from gold. Rather, they reflect short-term policy management in a more uncertain environment.”

Gold remains an effective protection against systemic risk, currency weakness, and policy uncertainty, he adds.

“Ultimately, we continue to view gold as a valuable safe-haven asset. It is not a universal hedge against every market shock, but it remains an effective protection against systemic risk, currency weakness, and policy uncertainty. With prices already down roughly 15% from recent highs, much of the near-term bad news appears to be reflected in valuations. As a result, the downside linked purely to rate fears now looks more limited than it did at the start of the correction.”

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Vincent Mortier

Since the start of the year, some of the key convictions highlighted by Amundi, Europe’s largest asset manager, have been playing out and some trends have accelerated.

According to Vincent Mortier, Group CIO, Amundi,” We are witnessing a regime shift characterised by heightened policy uncertainty and a distinct break in the international order. These key themes were highlighted at the Davos World Economic Forum and confirmed at the Munich Security Conference.

“Tariffs remain a key tool for the redesign of the new order. The recent Supreme Court ruling against Trump’s emergency tariffs introduced an additional layer of uncertainty to the policy landscape.

“All these developments confirm that the overall geo economic environment is in transition. President Lagarde’s mention in her speech of the ECB’s new repo facility for central banks outside the euro area signifies how policymakers are thinking about the rising importance of geoeconomics.

“We are clearly entering a more complex market equilibrium, where policy, including trade policy, geopolitics, and capital allocation are as critical as the economic cycle itself. With growth proving more resilient than initially expected and corporate profitability remaining robust, markets have remained well sustained.

“However, significant rotations are underway across countries, sectors, and individual stocks as the environment adjusts to the ongoing regime shift.

“We think diversification and flexibility will continue to be key in enhancing portfolio resilience and long-term returns.

“We see a late cycle environment continuing this year and therefore maintain a moderate risk on stance. Within this stance, we expect a rotation towards real economy sectors such as industrials and dispersion across regions and asset classes.

“Secondly, high valuations of risk assets constrain our ability to raise our risk stance. Valuations alone, however, are unlikely to trigger a major correction. Instead, triggers would more likely arise from liquidity tightening or a deterioration in credit conditions.”

In a fast changing world, please see the attached paper for more details, with contributions also from Monica Defend, Head of Amundi Investment Institute and Philippe d’Orgeval deputy group CIO as they relook at their key investment convictions.

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Alban de Faÿ, Head of Sustainable Responsible Investment processes for Fixed Income said: “The Green Bond Market has experienced significant growth over the past fifteen years, reaching €2,221 billion with new green bond issuance amounted to €442 billion in 2024. It has now become well-established, mature, and offers a wide range of opportunities we are committed to explore and invest in, on behalf of our clients.

“With our green bonds funds, we aim to finance the energy transition by investing in green bonds with positive and measurable impact on the environment and delivering returns throughout the different economic cycles. With this report, we aim to provide transparency regarding these funds, illustrating what we finance and the environmental benefits achieved.”

“Our impact investing philosophy is founded on three core pillars, which form the basis of our green bond strategies:

1. Intentionality: investing with a clear environmental objective
2. Measurability: tracking avoided CO₂ emissions
3. Additionality: increasing the net positive impact generated by the project or issuer’s activities”

Key highlights of Amundi’s Green bond strategies

• €5.5 billion invested in green bond strategies (as of 31/12/2024)
• +2,400 Green, Social and Sustainability bonds analyzed in Amundi’s proprietary database
• An average of 322 tons of CO₂ emissions are avoided per €1 million invested across our three open-ended funds.
• Main projects financed include renewable energy, green buildings, clean transport, energy efficiency and sustainable land and water use
• All funds are SFDR Article 9 and carry demanding labels such as Greenfin (France) and Towards Sustainability (Belgium)

———-

Notes:
[1] No 1 European asset manager based on global assets under management (AUM) and the main headquarters being based in Europe Source: IPE “Top 500 Asset Managers” published in June 2024, based on assets under management as at 31/12/2023

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Vincent Mortier

Mounting concerns over large US fiscal deficits, along with consumers’ inflation expectations have started moving the markets. The issues around fiscal sustainability were further aggravated by discussion around the passing of the President Trump’s Big Beautiful Bill, the renewed interest in fiscal expansion in Europe (including German borrowing plans) and Japanese debt auctions according to Amundi in its monthly ‘Global Investment Views’.

Vincent Mortier, Group Chief Investment Officer at Amundi said, “Looking ahead, we could see some signs of weakness as markets start to focus on fiscal risks and tariffs. The big question is whether the allure of US assets is diminished by the fiscal issues, the challenge to the status quo by the US administration’s policies, and how that could affect US assets.

“We could very well see these old patterns changing in the future, but it is a long-term trend, not something that will happen within a short time frame. For now, trust in US institutions and their credibility remains intact – it may be questioned at various stages though.

“From an economic perspective, we see few themes playing out. We see economic activity decelerating in the US, with this year growth projections unchanged at 1.6%. Economic activity will be volatile due to net trade and consumption weakness. In the euro zone, we see credit growth and a continuation of improvement in the manufacturing sector. The defence and infrastructure push is likely to have positive effects on growth from 2026. The main question is how this will be financed.

“The impact of US tariffs on underlying inflation will be gradual. The tariffs’ impact on US inflation has been muted, and we haven’t seen higher consumer prices so far. But we are monitoring whether these are passed on to consumers and what impact they could have on corporate margins if companies are unable to pass on the costs. In the eurozone, the inflationary backdrop is slightly different, and inflation seems on track for deceleration.

“International trade negotiations will get increasingly difficult. The latest round of US-China talks in London indicated that China will remain a tough negotiator. Erratic trade policies may affect the appeal of US assets. Although section 899 (which we have always believed was a negotiation tactic) of the Big Beautiful Bill has now been scrapped, such provisions tend to increase uncertainty and volatility in the markets.

“We upgraded growth projections for some EM such as Brazil (2025), Mexico (2025), and India (2025 and 2026). In China, some recent data has been benign for example on retail sales. However, we would like to see a more sustained trend to convince us to upgrade our growth expectations. A boost to durable goods consumption from government subsidies should be supportive, but once the effect fades, this would weigh on growth. We stick to our projection of 4.3% for this year.

“We remain marginally positive on risk assets, with increased valuation discipline. Growth-inflation mix is less of a headwind, and we do not see a corporate earnings recession. But fiscal direction and the potential economic impact of uncertainty on tariffs and of geopolitical conflicts point to high volatility.”

Monica Defend, Head of Amundi Investment Institute and Chief Strategist added that “Our main investment convictions centre around the fact that debt and fiscal worries are rising, but curve steepening opportunities persist in fixed income. In an overall flexible stance, we moved to neutral on EU. Carry is attractive in corporate credit, but we acknowledge the bifurcation between high and low rated companies and large and smaller ones. We stay positive on investment grade, particularly through EU banks.

“Equities in US have been resilient, ignoring negative scenarios. Valuations have risen to rich levels, whereas those in Europe and Japan are close to their averages. As we enter into H2, the important point is to see which businesses are able to pass on the costs to consumers and preserve margins. Hence, valuations and quality both will become important.

“Emerging market at a time of strong growth and a weakening dollar. Volatility from international trade may be tackled by exploring domestic ideas. China presents a nuanced case where recent domestic data has been strong, but we stay neutral on equities, waiting for sustained improvement. For now, we explore other parts of Asia, LatAm and emerging Europe for equities and credit.

“In multi asset, we do not expect a recession in the US, and Europe, Japan and the EM world also show reasonable growth. But risks such as excess valuations, inflation resurgence, fiscal deficit and geopolitics remain. We rebalanced our stance slightly in duration and stay positive on risk but are doing so with more safeguards.”

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Monica Defend

Emerging market equities are positioned to outperform developed ones over the next decade according to Amundi, Europe’s largest asset manager.

The US-China tech rivalry will particularly benefit India due to its growing start-up ecosystem and role as an alternative innovation hub, noted Monica Defend, Head of Amundi Investment Institute and Chief Strategist

“In this environment, equity investors will have to cope with greater trade protectionism and regional rivalry, delayed climate transition, and technological transformation in the next decade. We believe sector allocation will be crucial for investors, with Artificial Intelligence supporting IT and Healthcare, capital expenditure trends favouring Industrials over Consumer sectors, and deregulation policies benefiting Financials across different regions,” added Defend.

“We expect emerging market equities to outperform developed ones over the next 10 years, with variations across countries. While the outlook for Chinese equities has improved because Beijing’s policy support has restored some confidence to markets, their performance will depend on domestic policy measures and US trade policies. Our central scenario assumes fiscal support will offset the economic impact of the current tariffs on US imports from China, but these expectations will be tested if the US administration hikes them back towards their recent peaks.”

Indian equities continue to top the equity expectations scoreboard at 8.2% annualised returns, with robust earnings growth prospects outweighing stretched valuations. The Indian market appears better insulated from tariff pressures that are hitting Asian factory hubs like Vietnam and Indonesia.

Moreover, India is emerging as a beneficiary of the ongoing tech rivalry between the US and China. Multinationals looking to diversify their supply chains are turning to India as an attractive alternative innovation destination. India’s rapidly growing start-up ecosystem is also appealing to global investors looking for new growth opportunities. “Demographics and a rising middle-class further bolster India’s appeal,” said Defend.

The outlook for European equities is supported by improving earnings growth, relatively favourable valuation levels, and reforms to boost productivity and restore competitiveness – as detailed in the Draghi and Letta reports.

“Germany’s recent fiscal push could further drive the area’s appeal, beyond our 7.5% return expectation.

“The Pacific shares a similar positive outlook. Japanese equities are benefitting from improved corporate governance, driving higher shareholder returns. Moreover, the end of the country’s long battle with deflation should support further rerating of its equity market.”

Defend said, “At the sector level, Artificial Intelligence will continue to support Information Technology, followed closely by Healthcare, with the benefits gradually extending to other sectors. The democratisation of AI and rotation from ‘hyperscalers’ to ‘enablers’ in the software sector should help boost global productivity and long-term equity returns.

“Climate change and geopolitical dynamics will favour capital expenditures, benefiting Industrials more than Consumer Staples and Discretionary sectors. Energy, Materials, and Staples face the most negative impact from climate change and ESG considerations, while Utilities fare slightly better but remain below regional market averages.

“Policy changes supporting deregulation should improve capital efficiency and shareholder returns, particularly benefiting the Financial sector. This support will manifest differently across regions – through deregulation in the United States, unwinding of cross-company shareholding in Japan, and high shareholder returns in the Eurozone.

“For investors, this trend points to the need to seek opportunities in emerging markets, Europe, and the Pacific ex-Japan region.”

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China’s innovation strategy has become increasingly centralised.

With its rapid advancements in critical technologies, today, China is a formidable competitor to the developed West for global technology leadership. Innovation can take many forms, including process innovation in which China excels to leveraging its large and dynamic manufacturing base.

“However, this is not enough. Technological progress also hinges on a nation’s ability to develop and spread innovation, to boost aggregate productivity and potential growth. On this, China’s innovation strategy has become increasingly centralised, with the government favouring specific sectors and systematically cracking down on others,” noted Claire Huang, Senior EM Macro Strategist, at the Amundi Investment Institute.

“A dynamic private sector and decentralised approach are essential for new technologies to spread and become accessible, fostering progress. In this respect, the environment for Chinese companies and institutions to innovate has deteriorated recently.”

Today, the United States and its allies still hold significant advantages in capital markets and innovation ecosystems, while Chinese regulators crack down on the financial sector.

“For China to sustain its technological rise, it must prioritise final-demand innovation. While top-down, state-driven approaches have been effective in certain areas, they may not be sufficient to boost long-term growth. If China’s policies continue to stifle these market forces, its technological rise may plateau. China’s future success will depend on whether it can balance its top-down, state-driven approach with the bottom-up forces of consumer demand and commercialisation,” she noted in the attached paper ‘China in the race to technological leadership’.

“Ultimately, the key to long-term technological leadership lies in a nation’s ability to commercialise and spread its innovations. As the Soviet Union’s experience shows, technological discovery alone is insufficient for sustained growth.”

The United States hosts the world’s most efficient capital market that incubates pioneering innovators (from 0 to 1). Its single and unified market provides a fertile ground for enterprises to expand their scale with unparalleled ease.

China has developed the world’s largest and most cost-efficient manufacturing sector. With its intricate and highly developed supply chains, it empowers companies to innovate through execution and scaling (from 1 to 100). Numerous Chinese manufacturers, with their ‘can-do’ spirit, produce goods that others often find economically unfeasible to replicate.

“Investing in Chinese tech leaders via selecting ‘scaling champions’ is a viable approach, considering the high barriers to entry created by their cost efficiency.

“Although corporate China exhibits competitiveness across multiple domains, geopolitical tensions and deflationary pressures loom large, potentially undermining its profitability and long-term growth prospects. A strategic shift towards stimulating consumer demand is crucial to fighting deflation and sustaining China’s technological ascendancy. A failure to escape deflation may weaken the investment case for China tech,” added Huang.

Asia commands the lion’s share in the production of sophisticated information technology hardware. “Attempting to relocate these established supply chains to the United States would almost certainly result in diminished profit margins, reduced yield rates and escalated costs for downstream consumers. Companies with higher pricing power and gross margins are likely to better absorb the costs of reshoring, thus mitigating the risks associated with America First policies.”

In this respect, it is worth mentioning the very active subsidies programme from the Chinese government, at every level of an industry that the government considers as strategic (e.g., within the semiconductor industry, subsidies are given to the upstream companies such as chemical or semi-equipment providers, to midstream fabs and subsidies are given to the downstream buyers of the end products).

“This process around subsidies at every level to develop an ecosystem from scratch at an unprecedented speed and scale is now proven, which China’s policymakers have learned from their previous successful experience in low/mid-end manufacturing.”

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Marie Briere, Head of Investors’ Intelligence Academic Partnership, at Amundi Investment Institute has reviewed the effects of various reforms implemented in different countries to promote private retirement savings.

In this paper, she notes that tax incentives have proven to be an efficient tool to boost retirement contributions especially for the most ‘active’ savers, and older and wealthier individuals. Encouraging automatic contributions from employers to retirement plans may be more effective to support a wider range of individuals to invest on the long term. Providing information on retirement saving needs can also be beneficial.

The paper reports that under-saving for retirement is a major issue for many economies. Benartzi and Thaler (2013) have long diagnosed a ‘retirement savings crisis’. In the US, according to the National Retirement Risk Index, 39% of working-age households will not be able to maintain their standard of living in retirement.

In Europe, more than 19.8% of people aged 65 years or older are at risk of poverty or social exclusion, and women are particularly at risk.

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.

What are the lessons learned from these reforms and how do the various incentives affect saving?

Briere adds that 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.

Getting people to save and invest for retirement is not an easy task and there are many reasons for that, she notes.

“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.”

Read the paper.

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