EUROPE - The European Fund and Asset Management Association is calling on European member states to provide greater access to tailored pension provision, financial advice and education to improve individuals' retirement savings.

Steffen Matthias, secretary general of EFAMA, the trade association of the European fund management industry, told IPE many individuals were unlikely to reach their retirement funding goals unless they have sufficient knowledge to ensure the way they invest their long-term savings assets reflects their personal needs.

In order to do so, young people must be educated in schools about their own economic affairs and then be given access to financial advice to ensure they select the right investment options to match their financial needs, he argues.

"People have to be educated not to spend everything they have and this is the responsibility of all Member States because you cannot go to a school in Paris or London or Brussels and say [every person] should act in the same way," said Matthias.

"[Financial] advice is crucial because most people are not intelligent enough to invest on their own. You need advice and flexible solutions so younger people can put money into equity and then protect it as they head towards retirement.

Matthias notes, for example, individuals in Sweden are given access to a wide range of investment options to suit their needs as well as financial advice when saving for retirement through the first pillar pension regime.

His comments also come on the back of pension reforms across Europe designed to increase pension provision but which has so far have struggled to persuade people to save for retirement.

The UK government has proposed the introduction of the National Pensions Saving Scheme (NPSS) in 2012 giving every employee access to some form of supplementary long-term savings provision but with access only to generic advice.

Likewise, in Germany, for example, the take-up of financial advice is still fairly limited, suggests Matthias, and individuals are perhaps not earning sufficient annual return on their investments to achieve their desired retirement funding target because the default investments options for pension scheme members are designed to cater to the wider market.

"What is normally offered is one solution for people who do not receive advice, such as a lifecycle fund," continued Matthias.

"But advice and flexibility are crucial because the needs of people are different. If you have no family, your needs are very different from people who have children wanting to study. So the question is how to allocate and invest in an optimal way."

EFAMA proposed in 2005 a new pensions regime be introduced called the European Personal Pension Account (EPPA) which could be tailored to each investor's specific needs but within a general investment framework.