women's wealth compact

UBS International Pension Gap Index 2024

Are the benefits provided by my country’s pension system sufficient if I want to maintain my standard of living after retirement? And what proportion of my own savings will I need to use to close gaps in my retirement planning? Fifty year-old Jane is asking herself these questions in connection with the UBS International Pension Gap Index 2024. She has worked full-time throughout her professional life and only took one three-year maternity break. However, Jane has hardly built up any savings of her own. When she retires, she wants to live off the money she has saved up in the mandatory pension scheme.

What is the necessary savings rate for Jane in Switzerland? UBS has analyzed the pension systems of 25 different countries using Jane as a fictional example. The UBS index reveals how much of her current income Jane has to set aside and invest each year in order to close her pension gap in different countries. The UBS International Pension Gap Index 2024 makes it clear that private savings and investments are needed in almost every country, because pension systems hardly ever aim to replace earned income on a one-to-one basis. The index also takes a look at the Swiss pension system and the challenges it faces. In Zurich, Jane would have to start saving sooner if she wants to maintain her accustomed standard of living. The findings of the index also illustrate that measures need to be taken at an early stage to ensure financial security.

Read all about pension planning for women worldwide and discover our recommendations for action.

How part-time work impacts pension planning

Almost 80% of mothers in Switzerland work part-time. This is because women often opt for part-time work to improve the balance between work and family life. However, reduced working hours lead to pension gaps in the long term, and these gaps can only be compensated for at great financial expense. One reason for this is that a reduction in workload has both direct and indirect consequences on income (loss of salary).

Depending on the profession and the extent of the reduction in working hours, future salary growth may also be influenced in the longer term, for example due to fewer opportunities for promotion within the company.

Claudia Goldin, winner of the 2023 Nobel Prize in Economics, even refers to the “motherhood penalty” and explains that salary differences between men and women are almost exclusively due to motherhood. Well-paid professions in particular demand a great deal of commitment and flexibility. Part-time mothers can only offer both to a limited extent.

The latest UBS study on retirement provision shows how part-time work affects subsequent retirement planning for individuals and couples. It also shows that periods of part-time work lead to larger pension gaps the later they occur in working life. The UBS study establishes that pillars 2 and 3 are particularly affected by losses of salary due to part-time work, and that these gaps are difficult to close.

Read how part-time work could affect your retirement planning, along with more exciting insights.

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