According to studies, Estonians estimate that the retirement pension should be about 70% of their final salary. The reality is that in the future the first and second pillar will make up only about 40% of the pre-retirement income. The aim for this study was to find out how Estonians save, what are the expectations for the future and what is reality.

„Estonians’ expectations for maintaining their life standard during their retirement are high, while their current saving habits do not guarantee the fulfilment of their expectations.“ – Anne Jürgenson

The study gives an overview of economic behaviour, economic psychology and the results of the development of decision-making processes, which illustrate the factors influencing saving habits. On the basis of theoretical knowledge and the experience of other countries, some ideas were proposed which could be helpful for influencing saving habits:

• The good feeling that will arise in few decades can seem equal to the good feeling today but they have crucial difference in decision-making process. The playfulness of saving products that would offer experiences also at the current moment would help to overcome this problem.
• Taking advantage of the social comparison aspects would be possible through generating the competition with similar people.
• Saving is difficult because current consumption and welfare reduce at the expense of saving. One solution would be sending a portion of person’s income directly into savings in case it increases. It would not mean changes in consumption patterns but rather the consumption potential would not be all used up.

Behavioural analysis show that almost all people involved in the interviews think that saving is important but only few are consciously engaged in long-term saving.

• Young people do not think about the future – they have their first salaries and there are lot of expenses. If they save, they keep short-term goals in mind.
• Parents’ experiences are different from that of young people. They mostly understand the importance of saving and are dealing with long-term savings.
• Older people are rather sceptical about long-term savings due to their earlier negative experiences.

One of the starting points of the study was the finding that spreading the information and raising the awareness alone do not necessarily change the behaviour and something extra should be done. The study has outlined some recommendations that should favour people’s saving habits:

• Raising awareness of the importance of saving, regarding to decreasing social risk.
• The most important target group for awareness-raising and skills’ acquisition are young people and children whose habits are still undeveloped and who are therefore easily influenced.
• Increasing the understanding of all parties, that success largely depends on the habits and regularity of the actions but also on the self-control ability.