70 percent of workers in Spain are not prepared for retirement

by Lorraine Williamson
retirement planning
ASSSA

As many as 70% of Spanish workers are not financially prepared for retirement. They don’t know how or if they can’t afford it. With an average difference of €400 between the last salary and the pension, it is therefore, advisable to think about this. 

The vast majority of Spanish retirees live solely on their pension. Yet only 30% of employees are currently building up a supplement to this pension. This conclusion is drawn by the consumer organisation OCU. 

Why are many Spaniards not thinking about their retirement? 

The main reasons that as many as 70% of workers are not now building up ‘a pot for later’ are;

  • they cannot afford to set something aside
  • they do not know how to do this
  • it is not necessary to think about it now

According to research by the OCU, some of the participants indicate they have too little knowledge of the financial products that are suitable for this. Furthermore, 20% prioritise other expenses or simply have too low an income to put anything aside. 

Experts advise employees to start building up a supplementary pension as early as possible. The spokesperson for the OCU also agrees. “On average, someone loses €400/month when he or she stops working and receives the first pension payment.” 

Companies in Spain encouraged to talk about retirement 

In recent years, companies have increasingly been encouraged to discuss pensions with their employees. This in the form of offering advice with financial advisors. The OCU indicates that employees like that their company offers this option. On the other hand, they also admit honestly that if the company had not offered this, they would not have done it themselves. 

However, there still seems to be a long way to go. There are only a handful of companies in Spain that support their employees in this. In addition, only 4.8% of companies have some kind of pension savings scheme for their employees, reports the director of Nationale-Nederlanden Spain. 

Experts advise Spanish companies on pensions 

Expert advice to companies is to combine a good pension plan with long-term investment funds. A good pension scheme can also make companies more attractive to employees. When an employee can choose between companies when looking for a job, and the circumstances are almost the same, they will in many cases choose the company with the better pension scheme. 

Also read: Changes in the Spanish state pension

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