New threat: young people undermines the system


Новая угроза: молодежь подрывает систему

Model of the behavior of Russian youth could have a negative impact on the foundations of the pension system, experts of the Central Bank

This is because generation Y is willing to live here and now, not to make large savings, to spend money for pleasure, and from the model of ownership could go to the economy of use. According to experts, the pension model itself has outlived its usefulness, and the youth had seen too much “empty” promises to continue to trust the state.

To live here and now

The younger generation, or rather its “behavioral irrationality”, may adversely affect the existing model of the pension system. To such conclusion experts of the Central Bank in compiling the report “the Main directions of the financial market for the period 2019 – 2021 years”.

The fact that young people born between 1980 and 2000 — the Millennials, or, as CB calls them, “generation Y” — are not configured to the accumulation of funds and purchase of the goods.

“Despite the relative activity of the Russian youth in the formation of savings, it is most inclined to invest available funds in high-quality experiences, the motivations are not always future-oriented.

In addition, the desire to control their own fate reduces the tolerance to participate in “sharing” schemes. In the medium term this may undermine the sustainability of existing pension systems, based on the mechanism of intergenerational transfers”, — stated in the report.

Thus, according to experts of the Central Bank, there is a risk of insufficient pension savings of the current young generation, leading to possible financial constraints at a later age.

Experts generally agree with the trends that notes of the Central Bank, however, pay attention that the current pension system is outdated in itself.

Model of the old pension system itself is really outdated and the last few years, the state actively reform, trying to convey to the citizens that the work will need longer, and the future well-being and the amount of the pension depends on their own efforts, but as shown by all the years of reforms population is not very eager to delve into the details and more all the reforms for citizens poorly understood.

And in the end, the society generalizes them to a small conclusion that the government is trying to reduce the liability for future pensioners, — says General Director of “Mani Fanny” Alexander Shustov.

It is difficult to call the youth a threat to the pension system in its pure form, rather the threat was hiding in a frenetic transition of Russia to market economy and frequent economic crises, which was given to the population to plan something for years to come, and try to live in the here and now, the expert adds.

The youth has no motivation to work for the good of the Fatherland, to the time of retirement to receive a living wage and to live and to enjoy life, agrees senior analyst, OOO “Expert plus” Maria Salnikova. According to her, young people are not interested in tax deductions on the “beautiful future” or covering of the current needs of the state in pension payments now.

Young people in the world have always been and will belong mostly to the poor people. Its basic model — consumption, said the head of analytical Department of “International financial centre” the novel of pancakes. Is life on credit, obtaining impressions, the absence of its own assets, except for education and skills, as well as weak activity in the accumulation.

Uber as a way of life

Meanwhile, young people’s attitudes are also affected by such a phenomenon as ubersetze — the economy of sharing, which in Russia, as noted in the report of the Central Bank, is still at an early stage of formation. However, this trend in the case of preservation in the long term can lead to a revision of need to have items in the property.

“The ultimate value to the consumer in most cases is just the use, not possession. This, in turn, can influence the balance of savings in the economy and strategies for their accumulation population,” the report reads.

Similar trends were noted in the report of Sberbank “30 facts about the youth of today.” In particular, experts note that people have next-generation Z (those born before mid-1990s) short planning horizon, and most do not set themselves ambitious goals in order not to be disappointed.

Their lives no long-term trends and sustainable concepts, they tend to live for today and not believe that incremental efforts will certainly lead to the goal.

Young people today really more focused on getting new emotions from travel, adventure and other events, and to a lesser extent concerned with the acquisition of property, property and any savings, accepts a currency strategist GK TeleTrade Alexander Egorov.

This approach does not restrict the freedom of action in changing places and living conditions, but leaves “in the fog” the more remote the prospects for economic development, he said.

At the same time, the expert notes, the philosophy of universal society of consumption — “live at one hundred percent here and now” leads to higher level of over-indebtedness, improving short-term prospects for the production of goods and services, but creates potential risks for the longer-term prospects.

It really poses a threat to the existing Russian pension system is based on the continuity of generations, not only personal, within a family, and collectively, through a system of redistribution of resources through the national Pension Fund, puts Egorov.

Do not bother! Just click

In October last year the Minister of economic development Maxim Oreshkin at the festival of youth and students in Sochi noted that generation Z’s self-realization more important than material prosperity.

“Young people have a fundamentally different perception of information, which, in turn, changes all global markets,” he said.

Analysts of the Central Bank also notice that a whole generation now spends most of his time online, including making through Internet a lot of household action. Hence there is a growing awareness of the value of your time, followed by the demand for simplified solutions, standardized on the “basic” option.

In the long term this could radically change the product line, which expect to see at the financial institution, its customers, experts say. Moreover, “can change and providers of financial services traditional financial institutions can take technology companies from related business sectors, which have generated a client base,” the report said.

However, the ease of obtaining services encourages distancing the client from making financial decisions, reducing the possibility of providing informed choice, and financial companies can use behavioral arationality in bad faith, violating the interests of consumers, said the Central Bank.

Thus, among Russians the identified 14.4% of carriers adventurous financial behavior. Another 11.5% gullible to scams, with vulnerable.


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