Analytics, Baltic, Financial Services, Pensioners

An average employed resident's preparedness for retirement was evaluated according to four criteria: knowledge, trust in pension plans, personal action, and confidence in living a decent life after retirement.

The value of the "Pensometrs" index for Latvia is the lowest across the Baltic countries – 2.9 points out of up to ten points, as SEB banka socioeconomic expert Edmunds Rudzitis told reporters today. In Estonia, the index is 3.6 points and in Lithuania 3.3 points.

People in Latvia have the lowest trust in sustainability of pension plans, they also are rather skeptical about the government's ability to ensure decent pensions.

According to Rudzitis, it appears that residents are hoping for a miracle – that is, they are doing nothing to ensure that they have decent pensions when they retire. For instance, 82% are not saving for retirement.

Almost half or 43% of residents currently in employment may be exposed to the risk of poverty when they retire, said Rudzitis.

Welfare Ministry's deputy state secretary Ingus Alliks also said that future seemed uncertain, as 34% of those with social insurance were making minimum social contributions.

The government has been unable to explain to the public in twenty years how important an individual is for his or her pension, said Alliks. This means that more active work has to be done to explain the meaning of pension schemes, and more active measures must be taken against the shadow economy. The pension system itself requires minimal changes, if any.