Ladies overlook retirement savings, a key concern highlighted.
During the Corona pandemic in Germany, different age groups showed variations in savings behavior, particularly in the areas of vacation spending and retirement provision.
According to a survey commissioned by Canada Life, conducted by Civey, a significant number of Germans curtailed vacation spending during the pandemic due to travel restrictions and safety concerns. This led to an increase in savings from this category across most age groups. The saved amounts from canceled or postponed vacations were frequently redirected towards more secure savings goals, including retirement provision.
Younger cohorts, often more flexible in consumption, showed a mix of stabilizing their retirement savings but also reallocating funds temporarily withheld from travel and leisure toward short-term savings or emergency funds. The pandemic highlighted the importance of prudent financial management across all ages, but the emphasis on retirement provision was markedly stronger among older Germans who faced higher health risks.
On the other hand, older age groups tended to prioritize savings for retirement more securely. Among 18-29 year-olds, 19% said they wanted to invest their savings in retirement provision, which is the highest percentage in any age group. However, among women, retirement provision is the least popular savings goal, with only 7% expressing interest.
The survey also revealed that an equal number of participants (46%) did not save money. Interestingly, more men (48%) saved during the pandemic than women (43%). Among male savers, retirement provision is the second most popular savings goal, with 14% choosing it. The most popular savings goal among respondents is the next vacation (14%).
The Civey survey found that more younger people (61% of 18-29 year-olds) saved during the pandemic compared to older generations. This trend suggests that the pandemic caused a general increase in household savings rates due to restrictions on consumption like travel, with age influencing the specific allocation towards retirement or other savings goals.
In conclusion, the overall pattern suggests that older adults increased their focus on retirement savings or maintaining them despite the pandemic. Middle-aged and younger adults increased savings partly due to decreased vacation-related expenses. Vacation spending dropped considerably across all age groups, inadvertently boosting savings temporarily.
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- Other savings goals, such as personal-health-and-wellness or women's-health, remained less popular compared to retirement provision and the next vacation, especially among women.
- Despite the higher focus on retirement provision, finance experts recommend that individuals should also consider allocating their savings to a diversified portfolio for a balanced health-and-wellness approach.
- During the pandemic, the increased savings in personal-finance was not only observed in retirement provision but also in emergency funds, emphasizing the importance of preparing for unforeseen situations.
