Most of Latvia’s inhabitants doesn’t know the way they may dwell in previous age

In keeping with the survey, 20%, or each fifth, resident of Latvia can confidently say that upon reaching retirement age they won’t fear about their monetary well-being. In the meantime, residents of neighboring international locations are barely extra optimistic – in Lithuania, 25% of respondents calmly await previous age, and in Estonia – 28%.

Among the many surveyed Latvian residents, doubts and uncertainty about their previous age are significantly pronounced – greater than a 3rd, or 38%, of these surveyed say that upon reaching retirement age they’re solely barely assured of their monetary well-being.

In Latvia, 15% of respondents indicated that upon reaching retirement age they really feel very insecure about their monetary well-being. In international locations neighboring Latvia, this share is relatively decrease – 11% in Lithuania and 10% in Estonia.

Among the many inhabitants of Latvia, younger folks aged 18 to 29 are the least involved about their monetary well-being in previous age. “That is defined by the truth that younger folks usually don’t worry about their pension, believing that there isn’t a want to consider their monetary scenario and the funds saved for previous age so early,” specialists clarify. Though we perceive this with out them.

Do not depend on state pensions

In the meantime, the European Fee’s lately revealed “Ageing Report 2024” has acquired a number of consideration in Latvia. It comprises a number of dangerous information for each the European pension system and Latvia.

In keeping with forecasts voiced within the European Fee report, by 2070 in nearly all European Union (EU) international locations the scale of the common state pension will likely be decreased in comparison with the common wage acquired. On the identical time, the most important lower is predicted particularly for Latvia: if the present common state pension versus the common wage in Latvia is 25.5%, then in 2070 the ratio of the state pension to the common wage will likely be nearly two occasions decrease – solely 13.5%.

“Because of this in Latvia, an individual who acquired a wage equal to the common wage within the nation and has not saved something additional, will obtain solely a state pension of 13.5% of their earlier wage after they retire in 2070, that means that their lifestyle and monetary alternatives will likely be decreased by nearly eight occasions. Changing these figures into euros, we get: in 2070, an individual receiving a wage of 1,000 euros will have the ability to depend on a first-level pension of solely 135 euros after they retire. Evidently, it’s not possible to outlive on such cash even now, a lot much less in 2070,” one of many Latvian newspapers commented on the information.

At the moment, the common pension to wage ratio in EU international locations is 43%, and by 2070 it is going to lower to 36%. This lower is because of the truth that there are increasingly more pensioners in European international locations, and fewer and fewer employees as a result of low delivery price. These are the traits which might be noticed in Latvia: now within the nation, one and a half working folks with their taxes pay a first-level pension to 1 pensioner, and by the center of the century, after solely 25 years, the ratio will likely be one to 1. The primary pension degree is shaped from the social tax of working folks.

Very important investments in demographic coverage, help for households and growth of immigration gates can delay this second, however not utterly stop it. The European Fee’s forecast for the way forward for the pension system is predicated on the belief that the pension coverage will stay unchanged. Due to this fact, the European Fee notes that personal accumulation of monetary sources for previous age (i.e., the second and third pillars of pensions) is the primary approach to make sure at the least an appropriate previous age and complement greater than modest state pensions.

Invisible folks discovered within the nation

Latvia has the best threat of social exclusion within the Baltics, based on a current research carried out by the RISEBA Graduate Faculty of Enterprise.

Social exclusion in Latvia threatens 369,000 folks, or 27.6% of the inhabitants, in Lithuania 410,000 folks, or 20% in the identical scenario, and in Estonia – 178,000 folks, or 18.9%.

In keeping with the researchers, this a part of the inhabitants may be referred to as “invisible”, since every of them is a lack of human capital and a possible socio-economic burden on society. Due to this fact, it’s essential to advertise the reintegration of those social teams into the labor market, making certain cooperation between public administration establishments, instructional establishments and non-governmental organizations. Invisible folks must be psychologically supported and taught monetary literacy. The research highlights focused lifelong studying, expertise monitoring on the nationwide degree and the event of digital expertise as choices for fixing the issue.