50% of Swiss between the ages of 18 and 30 do not have a 3rd pillar. That is twice as many compared to all adults. The reasons for this are their young age and lack of know-how. But when is the right time to take precautions? And what does it take? We provide a quick guide to the 3rd pillar.
Together with the Zurich University of Applied Sciences ZHAW, Raiffeisen surveyed the Swiss on the topic of retirement provision and summarized the results in the 2018 Pension Barometer. On the one hand, we read that the Swiss are not particularly confident about their pension provision. On the other hand, trust in the pension system is rather low, and there is a belief that people should take care of themselves. At the same time, many Swiss people underestimate their needs in retirement – and therefore run the risk of not having the money they need later on.
- Knowledge and personal competence in preventive care are low (340 out of 1000 index points), compared with “I trust the three-pillar system” (620 out of 1000) and “I take care / my attitude to preventive care” (642 out of 1000).
- 75% see themselves as responsible for their financial retirement provision (80% in D-CH, 66% in French-speaking Switzerland and 62% in Ticino).
- “Help yourself and you will be helped”: Confidence in the future viability and financial strength of one’s own private pension provision with the 3rd pillar is the highest (45%); AHV and the 2nd pillar only come in at 15% each.
- In the Swiss pension system, the funds from the AHV and pension fund should reach around 60% of the income earned before retirement – this applies to average incomes. But: 63% of those surveyed believe that they will need the same or even MORE money after retirement than at the age of 55-65. Of young adults (18-30 years), 22% even believe that they will need more; only 2% of older adults (51-65 years) believe this. Many therefore underestimate their pension gap: While the pension system for average incomes is geared towards around a third less income after retirement, two thirds of respondents want the same amount or more. At Smolio, the default settings in the pension cockpit are based on the tried-and-tested rule of thumb that income after retirement should reach 80% of earned income.
The mix of ignorance about retirement provision and incorrect assessment of the situation is critical
84% do not deal with the topic of old-age provision at all, too little or too late. Most people find it difficult to find information on the Internet, i.e. to become active themselves, which is why a fifth of the Swiss are most likely to turn to their own environment. Almost 40% of the young age group (18 to 30-year-olds) even trust the opinion of friends, acquaintances and relatives. For them, peer groups and their private environment play a much greater role than independent advisors, banks or insurance companies. Only a few inform themselves about retirement provision on the Internet. Perhaps because the topic of retirement provision is often seen as complicated. You’re not one of them, otherwise you wouldn’t be reading this article …
- Why are people addressing the issue of retirement provision? To maintain their standard of living in old age (35%), uncertainty about the Swiss pension system (22%), to save taxes (18%). Put simply, fear is the central motive for almost 60%.
- Why don’t people think about retirement provision? Too young (44%), no/too little money (40%), too complicated (22%), not interested (9%). The younger you are, the earlier you start to deal with the topic, the better it is for you. You can read why this is the case in the article on the compound interest effects of early payments into the 3rd pillar.
- Where do you seek advice on retirement provision? Friends/relatives/acquaintances (20%), independent advisor (18%), bank (17%), insurance (8%). A comparison with the data for young adults shows that the importance of traditional points of contact (independent advisors, bank, insurance) is much lower for them.
Third pillar, the obvious
Investing money in a pillar 3a is one of the basics of pension provision in Switzerland. Like brushing your teeth in everyday life. Because if you don’t know much about it, you’re playing it safe and not doing anything wrong. All the more surprising: many people do not have a 3rd pillar – even half of adults up to the age of 30. Half of young Swiss people have no idea about their potential returns with a 3a investment in securities. Financial education and self-responsible action look different.
- 50% of young people (aged 18-30) have no 3rd pillar – compared to 25% of everyone. Of all those who pay in, a quarter pay in little or almost nothing.
- Of those with a 3rd pillar, only 27% of all adults invest in securities. “Better safe money than higher returns” is apparently the credo of most people. This is despite the fact that the potential return on an investment in securities over a long investment period is substantially higher than with 3a accounts or 3a insurance policies. A staggering 51% have invested their money in a 3a insurance policy – which makes their sellers happy. Some of them earn 100% of their income from the acquisition commissions they receive from the insurance company for taking out your 3a insurance policy. Of course, the insurance company charges this acquisition commission to your 3a insurance policy – which is why the so-called surrender value (“how much money will I get back when the insurance is terminated?”) is usually zero point zero in the first 2-3 years. A 3a life insurance policy is not fundamentally bad, but it is far from ideal for everyone.
- 52% of young people say“I don’t know enough about securities” – even though they don’t need that much knowledge. Nevertheless, only 13% say that “investing in securities is not worthwhile, it’s not enough money”.
The funds for a 3a system would therefore be there, but there is a lack of “knowledge”
Interestingly, the study also found that those who are familiar with the pension system pay in more. So what does this mean? Should we trust the “experts” and do the same? According to the Forrest Gump motto “If there’s a queue, get in line. You never know what it’s for.” If in doubt, yes, but it would be more desirable to get an overview yourself and know what you stand for.
We have therefore put together an action plan for you for a quick orientation on the 3rd pillar
1. slacking up
You can find the answers to the most important questions in this article on the most common misconceptions about pillar 3a. We clear up the misconceptions there: Yes, the money is tied up, but there are exceptions.
2. select
You don’t have a 3rd pillar yet? Then it’s high time you started. Opening a 3a account with a bank is the least you can do – and don’t let anyone push expensive 3a insurance or 3a fund policies on you. We’ll show you how to get the most out of your 3rd pillar with low fees and the compound interest effect. You can find the results in this article on the effect of the compound interest effect of cost-optimized investment funds in the 3rd pillar. We have also compared the providers of low-cost securities investments in the 3rd pillar.
Find the best pillar 3a
Unbelievable – most people pay too much for their pillar 3a and get too little return. Are you one of them? Find out which pillar 3a is best suited to you with just a few clicks in our free comparison.
3. get everything out
Do you have a 3rd pillar but have not yet paid in the full contribution for the current year? Clear any surplus money from your account immediately and pay up to the maximum amount into the 3rd pillar! This will earn interest immediately. The money must have reached the pension foundation by the end of the year at the latest. You can find the current maximum amount in this article.
Mach den ersten Schritt zur finanziellen Unabhängigkeit
In einer Minute siehst du deine Vermögensentwicklung und dein Einkommen während der Rente.
Last update: 16.03.2025 14:52
