The majority of Estonian people contributing to the third pension pillar save less than 5 per cent of their salary into the voluntary fund, according to research from Luminor.

In total, just over a third (34 per cent) of Estonian workers have joined the third, or voluntary, pension pillar, which Luminor pension fund manager, Vahur Madisson said was “similar” to the rate in Latvia, where 31 per cent of people collect money for the third pillar.

In contrast, a “scant” 19 per cent of people of working age in Lithuania are saving into the third pillar.

However, the survey found that over three quarters (76 per cent) of people save less than 5 per cent of their net salary in the third pillar, with 37 per cent saving up to 2 per cent, while 39 per cent saved 3-5 per cent of their net salary.

In contrast, just under a quarter of pension savers set aside 6 per cent or more of their monthly net income, with almost 14 per cent putting between 6-10 per cent of their monthly net income into voluntary pension savings, while nearly 11 per cent save more than a tenth of their salary for the future.

The results showed that people of active working age put aside the most for retirement, as 30 per cent of those in the age groups 30-39 and 40-49 are saving 6 per cent or more of their salary in the third pillar.

The main motivator for this was a desire to take care of themselves financially in retirement, as 64 per cent of respondents cited this as the main argument in favour of saving.

Indeed, Maddison pointed out that while 28 per cent of people are sure or even very sure that they will manage financially in retirement, 37 per cent of respondents are somewhat sure and 36 per cent are not sure.

"A fairly significant part - 44 per cent - also points out the desire to live on savings instead of working in old age, and according to 40 per cent of the respondents, the purpose of saving for retirement is to ensure a prosperous old age," Madisson continued.

"Although saving for retirement came to the consciousness of the general public in Estonia almost a quarter of a century ago with the start of the mandatory pension system in 2001, the number of people saving for retirement as well as people who are uncertain about the future shows that raising people's awareness is still relevant.

"Considering the long-term forecasts of the Estonian labour market and the future outlook of the national old-age pension, putting money aside for the pension itself, and for the longest possible period, is the only way to maintain the current living arrangement to the same extent as possible when leaving the labour market."

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