Many Hungarians Face Tough Retirement Years

July 19, 2006 ( - Hungarians, like many of their counterparts in countries around the world, aren't universally well-prepared for their retirement years.

A new survey by pollster Median and insurer Generali Providencia Zrt., the Hungarian unit of Generali Vienna Holding AG (GES.VI), found that a third of Hungarians below 60 are properly preparing for the period after their career – in most cases by setting aside retirement assets, Dow Jones reported. The poll also found that only about 12% of the total population has life insurance or savings in a pension fund.

Of those between 18 and 60, slightly less than a quarter (23%) of those polled and 34% of current workers are putting savings in a voluntary pension fund, the survey found. Those employed in the public sector, by state companies or large multinational firms make up the majority of people who have savings in pension funds, while the self employed and those employed by small companies tend not to save in pension funds, the survey found.

“Most of the low income earners and those employed in the gray economy miss out on those savings vehicles, and they don’t have (any other) savings either,” said Zoltan Paal, Generali Providencia’s managing director, in a statement, according to the news report.

About 38% of those Hungarians older than 45 could easily have money woes once they retire, pollsters said. This age group has no significant savings and does not take part in retirement plans. About 28% of them earn little, so their state pensions will likely be very low, Paal added.

Many workers in that group plan to keep working after retirement age and regard their standard of health as lower than the average, according to the news report.

In Hungary, the state pays pensions, a development in recent years that can be supplemented by private savings in voluntary and compulsory pension funds.