Huge gap between expectations and reality when it comes to personal pension

BeFrank
3 Feb 2016

Six out of ten young Dutch people do not want to work after age 65 or want to stop working even earlier. Most of them think they will have saved enough to have a pleasant life without financial worries.

These are the findings of a survey of over 1,000 Dutch people aged up to 40 years conducted for online pension provider BeFrank. A quarter of the respondents want to retire at 65. Nearly 35 per cent would prefer to stop working even earlier. This is completely different to the policy of the government, which will continue to raise the age of entitlement to state old-age benefit in the coming years. Nearly 35 per cent of those in their twenties and thirties think that they will be able to live at the same level on the pension they have saved. A quarter of these millennials think that they will have saved enough by then.

What will I have left later?
“But if we ask how much young people are thinking about their own pension, 80 per cent of them answer ‘very little or not at all’,” says Folkert Pama, director of BeFrank. Many respondents think the issue is ‘a long way off’ and do not think about it yet. According to Pama, expectations regarding personal pension are often unrealistic. “Many people have no idea what they will need to get by each month in the future. A third of those we asked said they had no idea. Our mission is to do something about this. With our smart online service and by always communicating clearly, we are making pensions clear and comprehensible to everyone.”

Personal pension account
A quarter of the respondents that had little or no interest in pension said they would start to take an interest halfway through their careers. A third would put this off until a new job appeared on the horizon. Parents (53%), online (40%) and financial advisers (28%) are the most consulted sources for further information. Remarkably enough, nearly 60 per cent of the respondents think that a good pension scheme is important when considering the ideal job. Pama therefore argues for a personal pension account for all Dutch people. “This would give people control over their pension accrual. An employer or client would then not only pay into your current account, they would also pay into an account for later on.”

Pension app
The survey shows that there is a long way to go to increase awareness of pensions among Dutch people. The pensions system urgently needs renewal. BeFrank launched the first complete pension app in the Netherlands in 2012. Users now know how much pension they have accrued at all times and wherever they are. The app’s pension planner shows the development of your pension at a glance and what pension you can expect when you retire. It is a useful way to check if you will really have enough income for a decent life. “We are now working on the production of a series of pension videos, which are also aimed at increasing awareness of pensions among all Dutch people,” says Pama.

About BeFrank
BeFrank has been active in the group pensions market since 2011 and is the first premium pension institution (PPI) in the Netherlands. BeFrank offers a clear pension, straightforward communication and an online service at low cost. It is part of the Delta Lloyd Group.

About the survey
The survey was conducted by PanelWizard Direct. This is the survey panel of Kien research and it has over 30,000 members aged 16 years and older. The panel members have stated in advance that they are willing to participate in market research. PanelWizard applies the Gold Standard of MOA, the industry-wide recognised calibration tool for research results. 1,023 Dutch people participated in this survey.

For more information, contact: Isabelle van Ast. E-mail:pers@befrank.nl, Tel: 020 5621118.