Future perspectives: How can we avoid future old age poverty of today's youth?

Dirk Hofäcker, Duisburg-Essen University, Germany presented EXCEPT research on long-term socio-economic consequences of insecure labour market positions based on desk research and interviews with youth and experts. He outlined the main discrepancies between current public, occupational and private pensions assuming linear work career on the one hand and the insecure and highly mobile careers of youths on the other hand.

Policy Recommendations developed by EXCEPT project included:

Flexible access conditions, linked to atypical and self-employment in all of the pension pillars:

•  Youth will need savings from all three pillars to sustainably ensure their standard of living

Reinforce public pension insurance

• Expanding the coverage rate by including more groups (self-employed) into the compulsory insurance

Better transfer of entitlements in case of mobility

• like the Pan-European Personal Pension Product (PEPP) which represents an EU-wide pension plan and is therefore portable

No single solution for all countries

• Country specific conditions has to be taken into account

Presentation was followed by the panel discussion moderated by Rowena Merrit, University of Kent.

Involved in the discussion were:

Patrick Cantellow, Head of the Swale Youth Organisation, UK

Susan Kuivalainen, Head of the Finnish Centre for Pensions

Tanya Basarab, Research and Youth Policy Officer, European Union and Council of Europe (EUCoE)

Youth Partnership

Patrick Cantellow represented youth perspective why youth who may have a very low salary chose to opt out from occupational pensions, as he did.

“A lot of young people are in internships and apprenticeships on such a low wage, they’ve got no money to pay into a pension. They pay for their rent, their travel, their food. So it’s not a priority that’s up there on the list”

Still he noted the importance of education:

“Everything starts with education, at schools. […] We have lessons on money, mortgages and things like that on a very occasional day and pension is never a topic that comes up.”

Susan Kuivalainen also stressed the importance of financial literacy:

“Information and the knowledge is a key to increase people’s trust, people’s feelings and attitudes about pensions. If you do not have the knowledge then your opinion is based on your beliefs.“

Tanya Basarab emphasised on changing environment for young people

“The reality is that the lives young people have now are completely different. There is no previous pattern or expectations of previous pattern that we can apply into their life. […] So if a parent had a thirty-year career and received may be precarious pension but has received it. That cannot be an assumption we can work today.”