It would be most difficult for the Baltic residents to give up travelling in old age

According to a survey conducted by Luminor in the Baltic countries, about 40% of the Baltic residents admit that it would be most difficult to give up traveling in retirement age due to financial difficulties*. At the same time, experts point out that the participation of the Latvian residents in voluntary pension savings is still insufficient - only about half out of a total of 342 thousand participants in the 3rd pillar pension make regular contributions**.

In average 45% of respondents in Riga, Vilnius and Tallinn admit that it would be most difficult for them to give up travelling in case of financial difficulties in old age. On the other hand, for respondents in regions would be more difficult than for those living in the capital to stop gifting their loved ones on holidays.

Women are also reluctant to change their gifting habits, and one of every five men admit that they do not want to give up their hobbies, such as gardening and fishing. People are less likely to have difficulty giving up visiting friends and relatives (11%) and subscribing to TV or newspapers, which requires also less investment than traveling and hobbies. 

“Nowadays, older people have enough opportunities to live an active and interesting life. Moreover, the retirement age is increasingly perceived as a kind of renaissance of personality, when free time can be filled with hobbies or even new and unrealized hobbies. To avoid giving up the favourite habits at retirement age, it is recommended to think timely about additional contributions to the 3^rd pilar pension. If 5-10% of monthly income is allocated to the savings in the 3rd pilar pension, it will already be a good addition to the state retirement pension. This reduces the chances of having to give up your hobbies and favourite pastimes in old age,”

says Anželika Dobrovoļska, Head of Luminor Pension Products.

What amounts could people allocate to pension savings?

The survey shows that about half (47%) of the Latvian residents could allocate up to 30 euros per month to their pension savings, whereas in Lithuania and Estonia such an amount would be allocated by an average of a third of respondents. On the other hand, residents of Lithuania and Estonia would be most prepared to allocate larger amounts, for example, from 30 to 100 euros, 44% and 39%, respectively, at the same time the respondents from Latvia are less willing (35%) to allocate such amounts.

There are also differences between the sexes - men in Latvia are ready to allocate more to their pension savings than women. For example, one of every five men would spend up to € 100 for this purpose, and about one of every ten women would spend less than half of the said amount, while in neighbour-countries the difference is less obvious.

Currently, about a third of the population make savings for old age in the 3^rd pilar pension. And according to the latest data of the Organization for Economic Co-operation and Development (OECD), the retirement pension paid to seniors in Latvia makes up only 54.3% of pre-retirement income. This means that if there are no additional savings made in time, a rather significant decrease in income is expected.