The Bank of Spain believes that favoring financial products such as the reverse mortgage – a loan in the form of a monthly fixed income with the guarantee of the home – can help to reinforce the individual provision of citizens in the face of the challenge of greater longevity.
The increase in the "attractive saver" is one of the issues considered by the Bank of Spain as part of the strategy necessary to face the challenges arising from the aging of the population, according to the presentation made by the general director of Economy and Statistics of the entity , Óscar Arce, has made this Wednesday in Valencia in the "CEU Empresa Forum".
The presentation, published by the Bank of Spain, says that financial innovation can help to reinforce the individual forecast against old age, "increasing attractiveness saver (greater efficiency) and favoring the conversion of illiquid assets into liquidity (eg reverse mortgages) "
According to the Bank of Spain, the social and financial viability of the pension system requires far-reaching reforms on both the income and expenditure side.
In this sense, the entity reiterates that it is important to design an automatic mechanism that guarantees the financial equilibrium of the system, once the sufficiency that is intended to give pensions is defined.
It also advocates going to a system of notional accounts that adjusts the pension to what is effectively quoted, in order to promote greater contributivity and make pensions more transparent and predictable.