Pension Savings: The Real Return. 2014 Edition

Abstract

As stated by the European Commission in a 2013 staff working document, “the crisis has increased savers’ distrust in financial institutions and markets”. Similarly, the latest EU Consumer Markets Scorecard9 again ranks pensions and investments as the worst consumer markets of all. The present report documents a potential component of such distrust, namely the poor performance of private pension products, when inflation, charges and taxes are deducted from nominal returns. It extends the geographical coverage of an initial research by Better Finance entitled “Private Pensions: the Real Return” published in June 2013. Belgium, Germany, Italy, Poland and the United Kingdom were added to the initial group composed of Spain, France and Denmark. It also extends the period of time covered in order to measure performance from 2000 to 2013, as far as data was available. Thus, the Better Finance research now covers 75% of the EU population.