The low interest rates that many European countries’ central banks are switching to is impacting citizens’ perceived potential to save for retirement, their relationships within local banking institutions, and other factors, according to research from fintech firm Raisin and YouGov.
Most serious of the concerns regards their hope to save as much as they can before retirement. The survey noted that constituents across Ireland and Spain displayed the most concern regarding their financial future, followed by the relatively stronger economies of the UK and Germany.
“The respondents registered notable pessimism, with large majorities across all the countries surveyed questioning whether there is any point in saving at all,” Raisin said in a statement. “In France, the number is again lower, but, there, still 44% have lost confidence in the future of saving.”
France has shouldered its own retirement reform issues, prompting mass transit strikes across the country as opposition mounted against the government’s calls for a unified retirement system founded on a concept of “pension points” earned per day worked that are tradeable for benefits later on in life.
A large number of the survey’s respondents believe that the low interest rate environment will continue into the foreseeable future, which might also be correlated with their distrust of local banking institutions, the survey said.
“Majorities across Europe trust banks less due to the low and negative interest rate environment,” Raisin said. “Half of the Brits asked said the situation decreases their trust in banks, while this share is even higher in Germany and France. In the Netherlands, Ireland, and Spain, a full two-thirds have lost significant faith in their financial institutions as a result of the long-term interest rate situation.”
The survey tracked various degrees of sympathy toward banks that have excess liquidity taken off their balance sheets from the European Central Bank, with the highest levels of sympathy being found in Ireland.
CEO Tamaz Georgadze of Raisin said the issue can be alleviated by opening the market for cross-border savings and investment offers. The Berlin-based company works to “break down barriers to better savings for European consumers.”