Long-term savings provisions in Europe are flawed and are no longer able to meet the needs of ageing populations, finds the Janus Capital European Consumer Finance Survey.

The study, which is the first of its kind into the European household balance sheet, shows that there are alarming deficits in levels of personal savings and retirement provision across Europe. While consumer hopes and expectations when it comes to retirement age and lifestyle remain unchanged, the collective ability to set aside sufficient funding for these aims has fallen behind. This, Janus says, could lead to a major shortfall in public finances.

The UK, France, Germany, the Netherlands, Spain and Italy were surveyed, and only 63 per cent of the 6,011 European adults in these countries asked were actively investing in savings vehicles.
Eleven per cent of savers admit they have been forced to raid these funds as a result of the recession, and 55 per cent of potential investors were deterred from taking out stock market investments by the effects of the credit crunch.

Six out of ten respondents also said they were not prepared to take any risks at all with their savings - which would need to be reversed if there is any hope of recouping the capital lost in the downturn.

The Dutch are the most likely to be savers with 61 per cent claiming to save a little or a lot. Just 25 per cent of Italians agreed and 32 per cent of the UK. An average of 58 per cent of respondents believe they have inadequate savings, which rises to 69 per cent amongst French participants, but only 39 per cent of Dutch respondents.

The average age that respondents are planning to retire was consistent across the countries at 62 years old. However, 47 per cent said they will fund their retirement with some form of state provision (73 per cent in Germany), and 36 per cent expect a corporate pension (68 per cent in the Netherlands and 45 per cent in the UK).

Across the board, 15 per cent of adults surveyed admitted that they have no pension provision in place.

David Bowers, joint managing director, absolute strategy research at Janus Capital, said: "The Janus survey brings home the scale of the saving shortfall in Europe. Hopes of early retirement remain at odds with current attitudes toward saving and with the range of investment vehicles that are available. There is widespread scepticism of stock-market investments, with most people relying on traditional bank savings account to fund their retirement."

Ric Van Weelden, co-CEO at Janus Capital International, added: "Advance findings from the first annual Janus Capital European Consumer Finance Survey clearly demonstrate how our consumer finances are singularly failing to keep step with our current long-term savings needs.

"Specifically, the report highlights how insufficient responsibility for personal savings, risk aversion and a widespread belief that the state will provide is fast creating a retirement time bomb for Governments and the financial services sector will be essential is we are to reverse this damaging trend."

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