Analytics, EU – Baltic States, Financial Services, Latvia, Pensioners, Wages

Meanwhile, the average monthly old age pension across the European Union (EU) is EUR 1,100, or 70% of the average wage in the bloc.

"It is therefore important how much people save up themselves. According to Eurostat data, the average income of retirement-age people (after 65 years of age) in Latvia is roughly EUR 450, while in the EU it averages at EUR 1,400 per month. Only in Bulgaria and Romania pensions are smaller than in Latvia," Dobrovolska said.

In her words, savings in Latvia make up only 6% of households' total income, while in the EU they make up 12%. In Estonia, the figure event exceeds the EU average and make up 13 to 14% of households' income.

"One must realize that state-funded pensions will make up only a part of old age income, while a large part will be made up of people's own savings. Regrettably, only a small proportion of Latvia's population are saving up money, for instance, only one third of the population are saving up money in third-pillar pension plans, and many of them do not make their contributions to these pension plans regularly," said Dobrovolska.

If people want to receive pensions like those that are paid in Europe they have to take care of their savings and assets, the Luminor representative said.

Baiba Bela, a sociology professor at the University of Latvia, informed that only 13% of people in Latvia save up money on a regular basis, while 17% save money irregularly.

In Bela's opinion, the reason for this might be low income, as only 7% of those people who earn less than EUR 400 per month save up money. However, the percentage of savers among those who earn more than EUR 800 per month is just 17.8%.

"We see that event those people who have the opportunity to save are not saving. As a result, 30% of people would be able to subsist on their savings only for a week in the event of job loss, 25% would be able to subsist for a month and 14% for three months, and very few people would be able to subsist on their savings for more than three months," said Bela