Europe is facing a retirement savings crisis that is "hiding in plain sight", with public pension systems unsustainable for the long term, Boston Consulting Group (BCG) has warned.

The consultancy surveyed savers from France, Germany, Italy, and Spain, and found that 80 per cent of those with under €250,000 in assets did not feel prepared for retirement.

It argued that publicly funded retirement income would decline “substantially” in the coming years, but noted that just 18 per cent of respondents had private pension alternatives.

Furthermore, despite the widespread unpreparedness for retirement, only 60 per cent of savers were aware of private pension options.

BCG found that, once informed of the options, interest in pensions increased and respondents said they would boost their savings allocation by an average of 10 percentage points.

The consultancy therefore urged private pension providers to capture this opportunity by increasing their communications efforts and shifting their relationship with consumers to become ‘trusted retirement partners’.

Private providers were also encouraged to use agentic AI to provide personalised guidance and build a credible value for money proposition.

BCG’s research showed that under-35s were already turning to AI for retirement guidance more than financial advisers.

Despite this, 90 per cent of respondents said they would welcome outreach from a retirement adviser at key life moments, but 80 per cent who had discussed products with an adviser had to initiate contact themselves.

A lack of impartial advice was the top complaint among people who were unhappy with their adviser, ahead of cost or communication style.

Private pension providers were urged to deliver value during the transition to retirement by deploying advisers and consolidation tools when they were most needed, and to capitalise on trust in the industry to provide post-retirement value through decumulation solutions, protection products, and partnerships.

“The retirement savings market in Europe is large, underserved, and structurally destined to grow,” the report stated.

“The demographic shift is locked in. The income gap at retirement will widen. The only remaining questions are which providers will succeed in closing the retirement savings gap - and how.

“The results of our survey unambiguously illuminate the strategic imperative for life insurers and asset managers: this is not a product gap to fill; it is a relationship to own.

“Customers across France, Germany, Italy, and Spain are anxious, lacking in good information, and hungry for guidance.

“Interest surges to over 70 per cent the moment a product conversation begins. The barrier is not demand; it is initiative."

BCG argued that providers that reach customers first with clear, impartial guidance will build the deepest trust and the most durable relationships.

“The market will not wait,” the report continued. “Public pension shortfalls will deepen, the savings gap will widen, and customer anxiety will grow.

“Providers that act now with the right proposition, the right model, and the right sense of urgency will define the competitive landscape for a generation.”

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