Analysis of the third pillar pension : prospective graduates’ perspective

Abstract

The aim of this research was to study University of Malta students’ attitudes towards retirement, focusing on the factors that affect their savings behaviour. Identifying such factors would help in developing better retirement plans, where individuals would be incentivised to start saving for their retirement at a young age. This would result in the enjoyment of a smooth pattern of consumption as it would be easier for the retiree to transition from the working years.

In order to address the research question, a questionnaire was distributed to all university students via the Registrar to analyse the perspective of students regarding the third pillar pension. Participants of the questionnaire consisted of a sample of 207 students where several attributes that influence students’ behaviour were studied and assessed. Factors that were considered to be critical in the students’ behaviour were asked in the questionnaire, including their knowledge about pensions, their concerns about the future and their prospective financial management once they graduate. The study revealed that there is a link between the students’ lifestyle and their money management, as many would rather save and enjoy their life rather than think of their financial future. The students, especially those younger in age, were keener in living a YOLO lifestyle and saving for their life goals rather than start putting some money aside for future use in retirement. Living such lifestyle requires a lot of money, hence why students admitted that they would fear that they would not have enough financial resources to save for retirement. This study also revealed that younger university students had poor knowledge about the financial market, which further explains their disinterest and inability to invest in the long term. At the same time, a number of students seemed to be interested in learning more about financial products aimed towards saving for the future.