Study: Global Retirement Market to Grow 66% by 2020

(September 2, 2010) — By 2020, retirement assets worldwide are expected to grow 64% to €36 trillion ($45.6 trillion), according to research by Allianz.

“The emerging markets of Asia will develop most dynamically,” Renate Finke, senior pension analyst at Allianz, said in a news release. “By 2020, these markets are expected to grow by 16.8% a year, reaching a total volume of €2.2 trillion, or the size of United Kingdom’s current (retirement) market.”

US retirement assets, which were valued at €11.1 trillion at the end of last year, are expected to balloon to €16.3 trillion by 2020, according to the Allianz Demographic Pulse study, representing a compound annual growth rate of 3.6%.

According to the firm’s research, the world’s total retirement assets stood at about €22 trillion last year. In 2009, the United States was the leading retirement market in the world, followed at 11.5% by the United Kingdom. Western Europe’s combined retirement assets came to slightly more than 20% while Australia and Japan each claimed 3% of the global market.

Investment losses in 2008, maturing pension systems, and longevity and reforms of pay-as-you-go public pension systems will propel the need for retirement savings in the future, Allianz showed. Finke said: “We expect the escalation in retirement savings to be the driving force for the development of the monetary wealth in many countries in Europe, Asia-Pacific and the United States.”