28 November 2022

Keynote speech by Commissioner McGuinness at European Retirement Week

The current challenging economic environment and how that affects pensions. And how what we're doing in financial services policy can contribute to a stronger pensions sector and better pensions for citizens.

But of course, it's important that we talk about retirement, not just sporadically.

And I was delighted to hear that in the Netherlands they have a very good system where they routinely talk about pensions and it's not such a big deal, it's more part of the everyday life for people to have that engagement.

And that's how we would like it to be.

Because what impressed me when I walked in – I shook the hands of three or four very young people, I think they're here in the room, and I saw a sign for “Retirement” and I thought I'm in the wrong room!

But the truth is that we need people of that age to talk about retirement, because when you get to my age, it's past you if you haven't organised yourself.

And while we're making this a light-hearted presentation, it's not. It's really serious.

Because if you don't make provision, you perhaps don't perhaps have the quality of life you'd like to have. Or indeed the quality of health you'd like to have.

Becaues I've been saying repeatedly, when it comes to financial wellbeing – and pensions are part of that – that if you have a healthy financial situation, you have better health.

So this isn't just about pensions and money, this is about the overall wellbeing of you, your family and society.

And that's why I would commend your work to have this event and to have lots of events over a number of days, to make this topic really part of the conversation.

And I certainly want to help you in that.

So two topics really on my agenda this evening.

The current challenging economic environment and how that affects pensions.

And how what we're doing in financial services policy can contribute to a stronger pensions sector and better pensions for citizens.

So I think you know that we're living in very unprecedented times, and that there are huge economic challenges affecting the economy, and of course pensions.

We had the Covid-19 pandemic, and now we're living with the realities of an illegal invasion of Ukraine by Russia.

Now we're seeing high inflation, high interest rates, economic uncertainty, high energy prices, and of course growth rates have been lowered significantly because of this challenging environment.

Pensions are affected by all of this.

And moreso by uncertainty.

If you reflect on what happened recently in the United Kingdom, and certainly we watched this very carefully, you can see how markets react, and sometimes react in a very strong way.

Really, we have to emphasise that the situation is the EU is different to the United Kingdom.

The EU pension fund sector is much smaller relative to our economy than in the United Kingdom.

But discussions with the industry would indicate that Liability Driven Investment strategies (LDIs) – which everybody globally became more aware of – these contributed to the UK turmoil. They're less commonly used in the European Union.

But I'm a great believer in taking warning signals even if they don't immediately cause concern.

Complacency is something that we should not allow creep in. We should seek to understand better market trends.

So we're monitoring the situation together with EIOPA.

And that's really, really important.

Of course, citizens on a day-to-day basis are facing cost of living increases...

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