Uwelfare

Empowering university students to start saving for their future and taking care of their health. 

Country of test: Italy

Our inaugural project has an unexpected focus: young adults in their early twenties. This is a demographic that, despite representing the future of our societies, is often neglected in some important ways, and does not receive the attention and investments it deserves.  

Young adults typically demonstrate a low inclination towards saving money, and the current economic climate, where many face unstable, underpaid, and fragmented early career paths, is not helping them. These circumstances can significantly delay the process of saving for retirement, potentially compromising their financial security in later years. The ongoing demographic transition and its impact on the sustainability of welfare systems add another layer of uncertainty to their future well-being.  

Young men and women often live in environments that do not encourage them to take care of their nutrition or their mental health, refrain from harmful habits that may lay the groundwork for future health complications.  

Health across the lifespan exhibits a strong path dependency. This means that an individual’s health status at any given age is largely influenced by their health conditions and behaviors in earlier years. The early twenties represent a crucial window of opportunity in this regard,  because at this age the human body still maintains a high degree of plasticity. Prevention efforts initiated during this period are thus likely to yield the most substantial and enduring health benefits. 

Just as early health interventions can have lasting impacts, early financial planning can significantly influence future financial security. The sooner individuals begin planning for their financial future, the more closely their retirement income is likely to match their working income. Their money, when invested early, has more time to grow and work in their favor. 

Despite the clear advantages of early health and financial planning, both for them and for society, there is a noticeable lack of guidance and support for young adults in these areas. Our idea is to help young people take the first step, the most difficult one, after which it is much more likely that they will maintain the new behavior. 

Fast Forward Foundation has chosen to concentrate its efforts on university students living away from home. In Italy, this demographic is substantial, with approximately 450,000 students residing in regions different from their home, and up to 800,000 when including those living in different provinces.  

The Foundation further narrows its focus to students living in university residences, whose number is currently around 50,000. This figure is expected to increase rapidly, driven by investment in new student housing through the National Recovery and Resilience Plan (PNRR). University residences will therefore become an increasingly important tool for social inclusion in the coming years.

The project’s scope encompasses three key areas crucial for the long-term well-being of these students: complementary pension plans, healthcare, and preventive measures.  

The first phase of the project is to anticipate young people’s access to a supplementary pension fund. For reasons that are not their fault, on average young Italians start saving later than their peers in other advanced economies, usually when they get a stable job or register for a VAT number. Instead, it should become a habit that is acquired as soon as they earn their first money. 

The mechanism behind the project is simple: students living in one or more student residences are offered the opportunity to join an open pension fund with two important advantages. The first is a discount on the fund’s management costs, the second is a contribution to the fund itself, assigned in proportion to a number of parameters.  

The project extends beyond financial aspects, as empowerment is equally important. Indeed, a key part of the project are the innovative pension and financial education workshops that are also offered to the students.  Among the reasons of the low participation rate in complementary pensions in Italy (34%) are a poor pension culture, distrust towards financial investments, and too little knowledge of how they work and the their opportunities.  

Of course, a communication campaign is also being planned to encourage students to join the initiative. 

The project is about to start. According to the current planning, the financial education activity will begin in November 2024 in a student residence in Turin, with about one hundred students, but we are working to add three student residences in other regions of Italy.