Turning voluntary saving for retirement into “mission possible”
Turning voluntary saving for retirement into “mission possible”
Challenge Owner
The Problem
“[…] while most Europeans rely on first pillar, or statutory pensions, for their retirement income, we know that this is no longer sustainable. There will be fewer workers contributing to an increasing number of retirees and some citizens risk being left behind.”
– European Insurance and Occupational Pensions Authority (EIOPA) Chairperson Petra Hielkema[1]
Europe’s population is ageing rapidly, increasing the strain on national pension systems. Over the past 20 years, the ratio of elderly people to the working-age population in the EU has grown from 27% to 37%[2], and it is expected to reach 59% by 2070[3].
The problem is already evident. The risk of old-age poverty is around 19% across the EU and significantly higher in the Baltics (42% in Latvia and 47% in Estonia)[4]. At the same time, statutory pensions are expected to replace a smaller share of people’s pre-retirement income. While the EU average is projected to decline from 45% in 2022 to 38% by 2070, Latvia is expected to see a much steeper fall – from 56% to just 24%[5].
Despite this, participation in voluntary pension saving remains limited. In 2024, the Bank of Latvia reported 445,000 third pillar pension account holders, with only half making active [6]. Furthermore, research to be published by the Baltic Finance Centre shows limited understanding of the third pillar pension: around 20% of surveyed adults have heard of it but do not understand it, and 9% of people aged 18–24 have never heard of it at all.
The core question is what types of simple digital tools would prompt and enable people to start saving for retirement and make the goal feel clear and achievable.
The Challenge
Design a solution that motivates and enables people to actively save into their third pillar (voluntary) pension.
Things to consider
- Why people currently do not save for retirement voluntarily (lack of information, behavioural barriers, procedural barriers etc.).
- Whether your solution targets the general population or a specific group (e.g. young people, self-employed) and their main needs and barriers.
- To what extent your solution leverages behavioural principles (nudges, defaults, framing etc.) to make saving easy, hassle-free and motivational.
- Solutions that could be scaled across the EU.
[1] https://www.eiopa.europa.eu/unlocking-potential-pensions-europe-2025-04-01_en
[2] https://ec.europa.eu/eurostat/en/web/products-flagship-publications/w/ks-01-25-037
[3] https://economy-finance.ec.europa.eu/document/download/971dd209-41c2-425d-94f8-e3c3c3459af9_en?filename=ip279_en.pdf
[4] https://betterfinance.eu/wp-content/uploads/Intro-Dana-Bachmann-Better-Finance.pdf
[5] https://economy-finance.ec.europa.eu/document/download/971dd209-41c2-425d-94f8-e3c3c3459af9_en?filename=ip279_en.pdf
[6] https://cdn.latvijasbanka.lv/aktualitates-banklv/zinas-un-raksti/jaunumi/17192-privato-pensiju-fondu-planu-neto-aktivu-vertiba-tuvojas-1-miljardam-eiro
The Problem
“[…] while most Europeans rely on first pillar, or statutory pensions, for their retirement income, we know that this is no longer sustainable. There will be fewer workers contributing to an increasing number of retirees and some citizens risk being left behind.”
– European Insurance and Occupational Pensions Authority (EIOPA) Chairperson Petra Hielkema[1]
Europe’s population is ageing rapidly, increasing the strain on national pension systems. Over the past 20 years, the ratio of elderly people to the working-age population in the EU has grown from 27% to 37%[2], and it is expected to reach 59% by 2070[3].
The problem is already evident. The risk of old-age poverty is around 19% across the EU and significantly higher in the Baltics (42% in Latvia and 47% in Estonia)[4]. At the same time, statutory pensions are expected to replace a smaller share of people’s pre-retirement income. While the EU average is projected to decline from 45% in 2022 to 38% by 2070, Latvia is expected to see a much steeper fall – from 56% to just 24%[5].
Despite this, participation in voluntary pension saving remains limited. In 2024, the Bank of Latvia reported 445,000 third pillar pension account holders, with only half making active [6]. Furthermore, research to be published by the Baltic Finance Centre shows limited understanding of the third pillar pension: around 20% of surveyed adults have heard of it but do not understand it, and 9% of people aged 18–24 have never heard of it at all.
The core question is what types of simple digital tools would prompt and enable people to start saving for retirement and make the goal feel clear and achievable.
The Challenge
Design a solution that motivates and enables people to actively save into their third pillar (voluntary) pension.
Things to consider
- Why people currently do not save for retirement voluntarily (lack of information, behavioural barriers, procedural barriers etc.).
- Whether your solution targets the general population or a specific group (e.g. young people, self-employed) and their main needs and barriers.
- To what extent your solution leverages behavioural principles (nudges, defaults, framing etc.) to make saving easy, hassle-free and motivational.
- Solutions that could be scaled across the EU.
[1] https://www.eiopa.europa.eu/unlocking-potential-pensions-europe-2025-04-01_en
[2] https://ec.europa.eu/eurostat/en/web/products-flagship-publications/w/ks-01-25-037
[3] https://economy-finance.ec.europa.eu/document/download/971dd209-41c2-425d-94f8-e3c3c3459af9_en?filename=ip279_en.pdf
[4] https://betterfinance.eu/wp-content/uploads/Intro-Dana-Bachmann-Better-Finance.pdf
[5] https://economy-finance.ec.europa.eu/document/download/971dd209-41c2-425d-94f8-e3c3c3459af9_en?filename=ip279_en.pdf
[6] https://cdn.latvijasbanka.lv/aktualitates-banklv/zinas-un-raksti/jaunumi/17192-privato-pensiju-fondu-planu-neto-aktivu-vertiba-tuvojas-1-miljardam-eiro
