New EU proposals to help consumers to better invest and save for retirement

The European Commission presented a series of measures today as part of its Savings and Investment Union (SIU) that should make it easier for consumers to invest and save for their retirement.

The Commission intends to develop supplementary (i.e. non-state) pensions by revising the Pan-European Pension Product and by encouraging auto-enrolling consumers into savings plans. The Commission also intends to facilitate consumer access to savings and investments accounts, by encouraging EU countries to simplify taxation and ensure a wide range of appropriate products. This can help consumers save more for retirement and invest, but product quality will be key.

The plans should also lead to better supervision of financial markets, making better use of currently available tools. This will benefit consumers by helping to harmonise supervision, so the same rules apply everywhere, not just in theory but in practice.

The Commission also says it will press for a deal with EU negotiators on the Retail Investment Strategy, but will pull the proposal if it’s not heading in the right direction. Getting this right is critical to ensure consumer access to better quality investment products; if it fails, it will simply not be possible to mobilise consumers’ savings to support the European economy.

BEUC Director General Agustín Reyna commented: “We have a pension crisis around the corner so these proposals are quite positive and should help consumers to be able to invest more easily and save for their retirement. For far too long now, consumers have been leaving money sleeping on current or savings accounts due to the fact that investment products in Europe are not attractive enough, since they give very little returns due to high fees or are simply not distributed amongst consumers. This has led to the situation where many simply cannot afford a comfortable retirement.

“The Commission has shown greater awareness and willingness to act on these issues than most national capitals. We really hope the Commission can now convince EU governments of the need and urgency for reform. If national governments continue to defend their incumbent financial industry de facto opposing the creation of a proper single market of retail investment products, we will not only continue harming consumers but also the European economy”.

Read more:

• How the EU can make financial advice fairer for consumers: Retail Investment Strategy factsheet

• Poor financial advice costs consumers a fortune, but that’s just the tip of the iceberg: infographic

• BEUC awareness campaign on the Price of Bad Advice.