The European Commission said it wanted to boost financial literacy among older Europeans — and saw pensions as the way to approach the issue.
At a conference in Brussels on June 10, Financial Services Commissioner Margarida Marques Albuquerque highlighted a key aspect of the EC’s upcoming Savings and Investments Union (SIU) strategy, designed to ensure the older population understood investments and saving possibilities.
While most financial education efforts have focused on the young, Albuquerque said the European Union also needed to focus on senior citizens, many of whom were approaching retirement without the tools to manage their savings.
“Financial literacy is a need that does not only concern young people,” she said.
A rapidly ageing population was making the issue urgent, she added. “We cannot have a whole generation get old and discover they don’t have enough pension,” she warned.
The EC wants Europeans to take a “big step” from basic savings accounts to actual investment. That transition, Albuquerque said, was the strategy’s core. But making it happen would require trust and simplicity.
“Even financially literate people find it difficult to make investments sometimes,” she said. “It shouldn’t be as difficult as it already is.”
The plan was to create and promote simple investment products that were accessible to people with limited means. “This should be an offering of simple products, things people can actually buy,” Albuquerque said. “You should be able to invest €10 to €15 per month, most people cannot invest much more.”
The goal was long-term savings: If people started small but early, she said, it could “actually be a substantial amount” by retirement.
Albuquerque described pensions, especially supplementary, privately managed ones, as the entry point for many into the world of finance. The SIU strategy would include recommendations to member states on how to strengthen such schemes.
“Where you have a developed capital market, you have a developed pension system,” she said. “It is not a question of if, it is a question of when.”
But she also warned that reforms must reflect demographic and social realities. “Typically, women are less financially literate. They have lower pensions and more risk of poverty after retirement,” she said. “We need to address different groups — different age groups and different groups in society.”
The EC saw its role as complementing national efforts. “The Commission cannot do it alone,” Albuquerque said. “We need to build on and complete what member states are already doing.”
The strategy would also tackle the EU’s fragmented financial landscape. “We have a lot of money, but it is in 27 different pockets,” Albuquerque said.
She questioned why pension investment rules differed so widely across borders. “I don’t understand how investing in the pension of a truck driver is different from investing in the pension of a doctor. I understand when they’re at work it is different, but when they are retired?”
She pointed to legacy and inertia. “I understand it is from tradition and how the market was built,” she said, but insisted that harmonisation is now necessary.
A major part of the proposal will be aimed at strengthening supervision of EU capital markets by transferring certain oversight tasks to the EU level.
Many member states, including Luxembourg and Ireland, strongly opposed the centralisation of supervision, which they saw as a move by France to gain greater control over EU capital markets. The bloc’s financial markets authority is based in Paris, and France was a general supporter of the initiative.
The document also included a set of other measures aimed at advancing the previously stalled Capital Markets Union, now renamed the SIU by former Italian prime minister Enrico Letta.
It proposed actions to strengthen the European asset management sector, develop supplementary pension schemes across the bloc and improve financial literacy. It also contained recommendations to promote the securitisation market, a process where portfolios of illiquid assets were bundled and turned into tradeable securities.
Industry representation group EFAMA cautiously welcomed the plan as “a credible pathway” to increase retail investment but warned that rules must remain proportionate and market-driven.
According to the EC, the SIU, first announced on May 24, aimed to unlock Europe’s “untapped financial potential” and help savers access better financial products.
It also included steps to boost financial education, enhance the asset management industry and promote the securitisation market, a technical process that allowed financial institutions to package assets including mortgages or loans and sell them as tradable securities.
“Wherever they are on the political spectrum, this does not matter,” Albuquerque said.
“This is about giving people better opportunities in retirement.”
