According to the Inverco Observatory report, accumulated savings in Individual Pension Plans grew by 2.7% in 2020, reaching an all-time high of 82,014 million euros, thanks to the revaluations experienced by Pension Fund portfolios during the last months of last year due to the market effect.
Practically all the autonomous communities increased their assets in Pension Plans in 2020, with Madrid, Catalonia, Andalusia and the Valencian Community, which represent 59% of the population in Spain, accumulating 64.6% of the savings in these vehicles.
15.9% of Spaniards are participants in an Individual Pension Plan, in line with the data from the previous year. With data at the end of 2020, 40% of Spanish families save through Pension Plans, a percentage that rises to more than half in the case of the Community of Madrid, Aragon, La Rioja and Melilla.
The average accumulated assets per participant account also increased by 2.6% last year, to 10,895 million euros, with a notable increase in Ceuta (5.7%). By regions, Navarre consolidated its position as the region with the highest average savings per participant (15,190 million euros), followed by the Basque Country, Madrid, La Rioja and Aragon, where the average assets remain above 13,000 euros. On the other side of the table, participants in the Canary Islands and Murcia have the lowest average assets, 7,290 euros and 6,464 euros, respectively.
The accumulated savings in these vehicles grew in the last year from 6.4% to 7.3% of GDP, a percentage which is above 10% in La Rioja, Aragón and Castilla y León. However, these are still very low levels, compared with the average for OECD countries, where the volume of Pension Fund assets represents 63.5% of GDP, in relative terms, according to the report 'Pension Funds in figures 2021'.
Towards riskier positions
In the last five years, the investment profile of Pension Plan participants has evolved towards positions with greater exposure to risk, with Mixed Funds representing 61.5% (compared to 44.2% in 2015), in addition to Equity products, which account for 15.3% of investment. Thus, at the close of 2020, 3 out of every 4 euros saved by Spaniards in Pension Plans have some exposure to equities. By Autonomous Communities, Catalonia, Navarre and the Basque Country have more than 80% of their savings in Mixed or Variable Income plans.
The decrease in the percentage of accumulated savings in the most conservative categories of Pension Plans (Fixed Income and Guaranteed) over the last five years is substantial, going from 44.3% to 23%. In the case of Fixed Income, it accounts for 15.5% of accumulated savings, although the percentage of participants is higher (22.6% of the total), so that the average assets per participant (7,464 euros) is much lower than the overall average. In the case of equities, the excellent performance of the equity markets in recent months brought the average assets per participant to 14,170 euros.
Despite being the most complicated year in decades due to the irruption of Covid-19, we have once again beaten an all-time high in assets invested through Pension Plans, although we now face the challenge of continuing to encourage these vehicles, which have become a magnificent alternative for channeling part of the savings accumulated in these last months of restrictions, and shortening that differential with the average of the OECD countries, which is still very large.
News: Insurance News 05/10/2021