Almost two-thirds (64 per cent) of Estonians feel financially uncertain about retirement, research conducted by Norstat on behalf of Baltic-based financial services provider Luminor has revealed.

The results also showed that only 28 per cent of Estonians feel confident about their future retirement, and that this sense of security varies by age.

The cohort most concerned about their future retirement is working-age people aged between 50 and 59, with 67 per cent of this age group feeling either very or relatively uncertain about their retirement.

According to Luminor pension fund manager, Vahur Madisson, the survey results indicate that retirement security remains an important issue for many Estonians, but also one that raises concerns.

“Although there are many options for saving for retirement, this does not mean that people feel secure about the future. The decisions made today directly influence how people approach retirement and the extent of their financial freedom once they retire,” Madisson noted.

“According to the survey, 27 per cent of Estonia’s working-age population does not save for retirement at all, and among the most pessimistic age group, those aged 50–59, the proportion of non-savers is nearly 30 per cent.”

Given this, Madisson suggested that the decision with the “most painful consequences” is to not save for retirement at all and to rely solely on the first pension pillar. He also stressed that additional saving, depositing, and investing are an "important part of the formula" for peace of mind.

The survey also highlighted a gender imbalance in anxiety around retirement, with women significantly more anxious than men when thinking about retirement.

In particular, 67 per cent of female respondents feel either completely or relatively uncertain about their retirement, compared to 60 per cent of male respondents. Men are more active investors in retirement savings.

Additionally, Madisson noted that the survey clearly shows that those with lower incomes have greater uncertainty about the future.

“People with a net income of less than €1,000 have, understandably, a more sceptical outlook on the future than those earning the Estonian national average or above. The most uncertain are those earning €750–1,000 per month, 76 per cent of whom are concerned about their upcoming retirement,” Madisson said.

The fund manager emphasised, however, that everyone, regardless of income or current standard of living, should consider the broader possibilities for saving and investing.

“All options should be considered, starting with savings and deposit accounts, where people can save money within their means, and extending to investing in the second and third pension pillars, as well as in stocks and bonds,” Madisson added.

He suggested that often, the easiest option is to contribute to the second and third pension pillars, with the survey showing that 42 per cent of respondents have invested in the second pension pillar and plan to continue doing so.

Furthermore, among those who have previously withdrawn funds from the second pillar, 11 per cent of respondents said they plan to rejoin it.

Maddison said this is an “encouraging trend” both for helping people better provide for themselves in retirement and for strengthening the Estonian pension system more broadly.

The survey, commissioned by Luminor, was conducted in May by Norstat. The survey included 1,001 respondents aged 18-74 from Estonia.

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