Study: 59% of Latvia’s Residents Believe Withdrawing Second-Pillar Pension Savings Would Reduce Income in Old Age
Assessing the public discussions about the possibility of withdrawing second-pillar pension savings before reaching retirement age, the majority of Latvia’s residents (59%) acknowledge that doing so would significantly reduce their income in old age, according to the latest public opinion survey*. Only about one-third (31%) of respondents disagree with this statement, while another 10% admit that they do not understand how the second-pillar pension system works.
At the same time, the survey data show that public interest in withdrawing second-pillar pension savings is declining. Comparing the survey results from February and May of this year, the share of respondents who would like to use such an option decreased from 39% to 36%, while the proportion of residents who would not withdraw their savings increased from 31% to 38%. This suggests that public awareness of the importance of pension savings and the consequences of early withdrawals is gradually increasing, leading to a more cautious attitude toward using retirement savings prematurely.
Young People Are Most Aware of the Risks of Early Withdrawal
A particularly high level of understanding regarding the potential risks is observed among young people. In the 18–24 age group, 81% of respondents agree that early withdrawal of pension savings could significantly reduce their income during retirement. Furthermore, 71% of young people state that they would not use the option to withdraw their second-pillar pension savings before reaching retirement age, even if such an option were available.
The survey also reveals a strong correlation between education level and understanding of the importance of pension savings. Respondents with higher education are more likely to agree that early withdrawal of pension savings can reduce income in old age (62%), while people with lower levels of education are more likely to admit that they do not understand how the second-pillar pension system operates.
The Importance of the Second and Third Pension Pillars Will Increase in the Future
The study’s findings align with the assessment of the Bank of Latvia regarding Latvia’s demographic trends and the sustainability of the pension system. As the number of working-age residents declines and the proportion of retirees increases, fewer workers will have to support a growing number of pensioners in the future. According to the Bank of Latvia’s calculations, the number of working-age people per pensioner could decrease from 2.6 in 2025 to 1.4 by 2060.
Under these circumstances, the importance of funded pension savings will increase. The Bank of Latvia forecasts that the contribution of second-pillar pension investments to future pensions will gradually grow, while the ability of a pension system based solely on intergenerational solidarity to maintain current income levels will decline. Upon reaching retirement age, the greatest beneficiaries will be those who have also voluntarily contributed to the third-pillar pension system.
“Businesses view the pension system not only as a social protection instrument but also as an important element of economic sustainability. Employees’ long-term financial security is closely linked to labor market stability, productivity, and overall societal well-being. Therefore, it is important to foster understanding of the significance of pension savings and maintain trust in a system that helps people secure a decent income after the end of their active working lives,” notes Katrīna Zariņa, Chairperson of the Board of the Latvian Chamber of Commerce and Industry.
Meanwhile, Evita Goša, Head of the Shadow Economy Reduction Working Group at Foreign Investors’ Council in Latvia, states:
“International and regional experience shows that when pension savings become easily accessible, they are largely spent on consumption rather than long-term security. This means that people become more vulnerable in the future, while pressure on public finances increases. Therefore, it is essential to maintain a clear and predictable regulatory framework that protects the primary purpose of second-pillar pension savings—secure retirement years—and to continue strengthening public understanding of the structure and importance of the pension system.”
*The public opinion survey was conducted in May 2026 by the research center SKDS. A total of 1,005 permanent residents of Latvia aged 18 to 75 participated in the survey. The survey was carried out across all regions of Latvia using a representative sample.