Analytics, Banks, Estonia, Financial Services, Pensioners, Society

At the same time, 68% of respondents claimed they have checked within the last year how much money they have collected in the second pension pillar, the bank said.

Through surveys, SEB has been mapping the pension-related awareness of Estonian residents for several years already and the bank said it is concerning that, ahead of the second pension pillar becoming voluntary, people's awareness of the pension system is still too low.

"The investment that a person collecting in the second pillar makes to their pension fund every month is the person's own personal property and income during retirement depends a lot on whether the person is in the most suitable pension fund and whether the right objective as to the size of the future pension has been set when collecting pension," Triin Messimas, head of the Estonian branch of SEB Life and Pension Baltic, said.

"People are usually concerned about whether their bank account will have enough money for the next month, but the long-term perspective is not seen and the care shown when it comes to one's long-term financial investment is insignificant," Messimas added.

"Lack of awareness of the current status of one's second pillar pension will definitely not benefit consumers. The average data in Estonia is often read about in the media and it is believed that I myself have accumulated little money with which I cannot finance my retirement or that the much talked about negative return will also affect my pension investments," Messimas said.

"Just as every pension collector is unique in terms of income and accumulation period, so are their personal investment performance and volume of assets. Not every person can make the right decision for themselves on the basis of the Estonian average," she added.

The bank said that, in light of the pension reform, people should definitely first review the current state of the second pillar accumulation. They should then think critically about the kind of scenario they wish to use to help secure their future -- how much knowledge they have to make investment decisions themselves, what the costs are, or whether there are other alternatives to increase their pension in the future.

According to SEB's survey, over half of the respondents found that they must accumulate additional resources to secure their future and only 11% said they would use the money collected in the second pillar to satisfy daily living needs.