The average Russian state pension has reportedly dropped to its lowest level in eight years in another major blow for the country’s under pressure economy. At the end of last year, it stood at an average of 25,000 rubles – the average salary being 86,000 rubles. The National Association of Non-Governmental Pension Funds (NAPF) has calculated that this means people receive from the state 29% of what they earned while working.
This is according to the Izvestia newspaper, with the figure now at the lowest in Russia since at least 2017 when it was at 36%. The International Labor Organization (ILO) recommends keeping the replacement coefficient at a minimum of 40%. But the All-Russian Research Institute of Labor reportedly says comparing today’s salaries with the pensions of Russians who have been retired for a long time is not indicative.
Vladimir Chernov, an analyst at Freedom Finance Global, believes the figure is not entirely negative, as it suggests a record increase in income for Russians in recent years because of an acute shortage of personnel.
Yulia Dolzhenkova, a professor at the Financial University under the Russian government, says the abolition of pension indexation for working people from 2016 to 2024 is another factor.
It comes as Russian banks are reportedly trying to “cash in” on customers.
Izvestia, writes the total cost of consumer loans from the top 15 firms has reached almost 37% on average.
This represents an increase of 1.3 percentage points since the start of February.
It is thought firms are attempting to “lock in” returns on new loans in order to offset the cost of expensive deposits.
There is thought to have been an increase in non payments which has forced market participants to put risks into the cost of loans.
Borrowed funds continue to rise in price even after maintaining the key level at 21% after a meeting of Russia’s Central Bank on February 14.
