15.06.2016

Study on financial provision awareness and behaviour in Austria in 2016

Financial provision increasingly relevant to more and more people - retirement, family and health care are the most important topics regarding provision

Financial provision is of great importance to 87% of Austrians
Nine out of ten Austrians have already purchased provision products
Only 2% have taken out a nursing care insurance policy

Financial provision is rated as highly important in Austria, and more and more people are recognizing the significance of having a financial cushion. 87% of Austrians already regard financial provision as very/ rather important (comparative level in 2015: 81%). The highest priority is accorded to provision for retirement (60%), for one's family (55%) as well as for health care. With regard to investing money for provision purposes, more than half of Austrians (52%) see safety and as little risk as possible as their top priority, followed by a capital guarantee and transparency of provision products (42% respectively). By comparison, only around one quarter of respondents (27%) consider high returns, resp. high yields to be an important criterion.

“The study confirms for us what Austrians consider important regarding financial provision: personal retirement provision, security for their families and health care provision. For us as the market leader in life insurance this is a clear signal that we have to focus even more strongly on the most important aspects of life and retirement insurance in consultations, namely guaranteed life-long pensions, as well as provision for families “, says Heinz Schuster, chairman of s Insurance.

An average 162 euro per month for provision products

93% of the Austrians surveyed state that they are already investing in provision products, for which they are setting aside an average 162 euro per month. In terms of capital available for financial provision, men are clearly ahead of women with 194 euro per month compared to 129 euro respectively. The amount available for saving increases with age. While persons aged 15 to 29 years allocate 114 euro per month to provision, the amount rises to 176 euro for people aged 40 to 49 years and 193 euro for those aged 50-59 years. In accordance with the pronounced safety consciousness, savings accounts and building savings contracts remain the most popular provision products for 67% and 54% respectively. 45% have private casualty insurance, and 36% have taken out a traditional life insurance policy. Only 2% have taken out a special nursing care insurance policy, which shows quite clearly that no strong awareness of the necessity of taking precautions in this area has developed yet.

“Provision for nursing care remains a little discussed topic in Austria, characterized by fear. The risk of needing nursing care in old age increases however in parallel with life expectancy. We all reach an ever higher age and want to enjoy our retirement, the topic of nursing care clashes with this and is still subject to denial”, says Thomas Schaufler, member of the management board of Erste Bank.

Retirement provision and saving for emergencies have the highest priority

For two thirds of respondents who save on a regular basis, resp. have already set aside a larger amount once, retirement provision (68%) and saving for emergencies (65%) are the most important reasons for financial provision. However, only 14% of respondents are making use of the opportunities offered by financial markets and invest in stocks or investment funds. If one takes a closer look at investment behavior, safety is the top priority for 89% of Austrians. 43% of respondents state that they have no money available for investment. However, at a young age even small amounts are suitable for long term financial provision. 41% admit that they don't know anything about money and investment. “If one wants to provide for the long term, one should in view of the low interest rate environment definitely look into the subject of securities. Sound advice is very important in this context”, notes Thomas Schaufler.

Bank advisor = financial security advisor

People who look for information about provision products are seeking out personal advice. For more than half of respondents (53%) their bank advisor is the first point of contact. While women like to obtain advice from family and friends as well (47%), men are significantly more likely to also make use of consumer information associations (27%), comparison portals (24%) and online information provided by banks (20%). When purchasing a provision product, Austrians also attach great importance to personal consultations. Almost half (48%) are turning to their respective bank advisor, while 35% are turning to a trusted insurance consultant. Nevertheless, a growing trend toward using online banking services for the purchase of provision products is discernible as well (10% vs. 6% in 2015) , whereby men (14%) are far more open to this than women (6%).

Additional disposable income due to the tax reform and dream pension

Austrians use the additional disposable income available to them due to the lowering of the wage tax at the beginning of the year in different ways. 29% are simply spending it or are planning on spending it, while 42% prefer to save or to increase their financial provision. 30% are ambivalent about it and haven't made a decision yet. As their net dream pension, in order to be able to shape their life according to their own vision, Austrians cite an average amount of 1,633 euro per month, with men citing a higher amount of 1,758 euro compared to women with 1,504 euro. Compared to the actual current level of average pensions according to Statistics Austria – 857 euro for women and 1,210 euro for men – there is a considerable gap. 38% of respondents nevertheless feel that their financial situation in retirement is secure. There are however large divergences depending on the age group: up to 39 years of age 27%, up to 49 years of age 40%, up to 59 years of age 49% and from 60 years of age 57% are of this opinion. 30% of respondents believe that the sum of their statutory pension and their additional private retirement provision won't be sufficient for them.

About the study: s Insurance, Erste Bank und Sparkassen commissioned the market research institute GfK to conduct an online survey on “Financial provision awareness and behavior”. In 2016, 1,000 persons between the ages of 15 and 65 years answered questions on the topics of financial provision, provision products, provision advice, provision goals, and their desired pension amount. The results are representative of the Austrian population from the age of 15.