Recent forecasts from the Social Insurance Institution (ZUS) paint a bleak picture for young Poles. Maintaining their current standard of living into retirement may lead to financial shortfalls as early as the 10th day of each month. Despite this looming crisis, a Prudential Family Index survey reveals that only 13% of people aged 25-34 are saving for the future. Alarmingly, nearly three-quarters of these savers opt to stash their money at home rather than in financial institutions.
Lack of Financial Habits
A significant factor in this trend is the absence of a savings habit ingrained from childhood. The survey shows that the older age group of 35-45 also struggles with saving, with only 20% taking steps beyond mandatory pension contributions to secure their retirement. Prudential’s Sławek Bełz highlights that financial habits are often learned from family members. Many in Poland’s older generation recall the hyperinflation of the 1990s, which discouraged saving and has left a lasting impact on financial behavior.
Financial Literacy and Trust Issues
Inadequate financial education also plays a role. Sixteen percent of young respondents cited a lack of knowledge as the reason they don’t save for retirement. Additionally, distrust in financial institutions is prevalent, with 13% expressing skepticism about their reliability. Nearly half of those without life insurance believe that agents push unnecessary products, further deterring engagement with financial services.
Living in the Present
Many young Poles prioritize current needs and desires over future planning. The Prudential survey indicates that one-fifth of 25-34-year-olds feel they have ample time to consider retirement, while 20% see no need, and 11% believe they will manage without savings. Bełz notes that the tumultuous period during which Generation Z entered adulthood—including the pandemic, economic instability, and geopolitical conflicts—has influenced this immediate-focused mindset.
Effective Saving Strategies
Despite the prevalent “sock” saving method, which is vulnerable to inflation, there is a growing recognition of the benefits of insurance-linked savings products. Currently, 28% of young savers utilize these products, which offer both investment and insurance benefits. Such solutions, according to Bełz, ensure financial security for retirement and protection against unforeseen events, highlighting the importance of starting to save early, even in small amounts.
In conclusion, while young Poles face significant challenges in saving for their future, increasing financial education and trust in financial products could foster better saving habits, ensuring more secure retirements.