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Most Hungarians plan to work on after retirement age

Most Hungarians plan to work on after retirement age Nearly four-fifths of the Hungarian population do not have any savings for pension purposes, whilst as many of them anticipate a worse or a lot worse standard of living than during their active career. Still, there are some signs of awareness of the need for improvement.

Although Hungarian society is becoming more aware of the fact that the state pension would not provide them with enough resources after retirement, still only 22% of people have savings specifically intended to beef up their pension pot, a recent survey by K&H Bank found. Pessimism is clearly widespread, as 69% of respondents in 2016 said they would expect to work during their grey years. That ratio was just 61% in 2015.  

The overall picture of the post-retirement financial situation looks just as gloomy, with 34% projecting a positive scenario and some two-thirds expecting the entire state pension scheme to collapse.

“Three kinds of attitude can be detected in Hungary when it comes to the pension issue,” said Péter Kuruc, executive of life insurance and own sales channels at K&H Biztosító. “Some simply deny the problem as some distant thing not to be worried about. Others take it for granted that they would have to continue working during retirement, whereas there are also many out there who plan to cough up the extra money from their own revenues.”

A reasonable chunk, some 34% of those surveyed, simply shrug off the issue on the basis of the fact that they wouldn’t live long enough in the first place to worry about pensions. This argument has been gaining momentum; the year before, only 29% thought the same. “This is a misleading stance, though, since life expectancy is 78 years for women and 72 years for men, respectively,” Kuruc said. “However, it is true that people are concerned that the retirement age would go up significantly which is a realistic scenario.”

Age brackets do have an impact on how one is ready tackle the issue. Those delaying starting pension savings are getting fewer in number, proportionally. The generation under-30 can pride itself on the most solid awareness; more than half of them are already members of a private scheme. 

“Pension insurance is gaining in popularity, which is great news for the industry,” Kuruc added. “This relatively young product is an ideal solution to provide the extra revenues needed to complement pensions.”

As shown by the survey, up to 14% of respondents now claim to have pension insurance up from 10% since 2015. “This pleasant trend may be evidence for the growing confidence towards such products. As little as HUF 15,000 per month would add up to a capital of HUF 8 million in 25 years if tax incentives are duly taken advantage of.”