As of: April 6, 2024, 7:49 a.m
By: Moritz Maier
Comments
Press
Split
More and more Germans are worried about poverty in old age. Demands for voluntary special payments for higher pensions are therefore becoming louder.
Berlin – Only recently, Federal Labor and Social Minister Hubertus Heil (SPD) announced a whopping pension increase of 4.57 percent. Nevertheless, millions of Germans continue to worry about their livelihoods in old age. According to
a current
NDR
survey, two thirds of those surveyed fear being poor in old age. For years, private pension provision has been considered a must for everyone who wants and can top up their pension. But now an alternative is coming into focus: Voluntary special payments into the statutory pension insurance are at a record high.
Pension in Germany: Record amount of special payments
In 2022, Germans paid more than one billion euros in voluntary special contributions to the statutory pension fund for the first time. The idea is to make special payments that have been possible since 2017 in order to compensate for deductions that occur when you retire earlier, i.e. deductions from the accumulated pension points and thus from the money. However, anyone who voluntarily pays in more and continues to work until the regular retirement age will receive a higher statutory pension. For many, this seems to be an increasingly attractive pension model, suspects the Left's pension expert, Matthias M. Birkwald.
“People trust the German pension insurance,” says Birkwald to
IPPEN.MEDIA
. The member of the Bundestag is in favor of abolishing the Riester pension and against share pensions such as the generation capital announced by the federal government. Instead, he wants to strengthen the statutory pension. To this end, the options for voluntary payments into the pension fund should be expanded. “We want to abolish the state Riester subsidy and instead enable people to transfer their Riester savings to their personal pension account as voluntary special payments into the statutory pension,” says Birkwald.
Higher pension in Germany: expansion of voluntary special payments?
The Social Association of Germany (SoVD) now also supports the proposal to expand the statutory special payments, which were still around 200 million in 2017 and have therefore increased fivefold within a few years. “From the SoVD’s point of view, the possibility of paying voluntary contributions into the statutory pension insurance should fundamentally be expanded,” says SoVD board chairwoman Michaela Engelmeier to
IPPEN.MEDIA.
She adds: “This could be a real alternative to the third pillar, private pension provision, for all those who do not want to leave their money to the capital market.”
The SoVD chairwoman has mixed feelings about the purpose of the special payments as devised by the legislature. “It is difficult to assess whether it is really worthwhile in individual cases to buy discounts in order to be able to retire early without discounts.” However, it is clear to the social association that the increasing volunteer amounts send a clear signal: “The increasing number of Insured people who buy discounts shows that the desire to retire early is increasing. This strengthens our demand not to allow any further increase in the standard retirement age,” says Engelmeier.
My news
Long imprisonment threatens: proceedings against Scheuer regarding the toll disaster probably shortly before the decision is read
Many pensioners are entitled to more pension points - but these are only available upon application
Satellite images reveal: Russia is arming Black Sea ports against drone surveillance
Putin spokesman threatens NATO: “At the level of direct confrontation” read
Revolution in cancer diagnostics: Researchers develop “groundbreaking” capsule test reading
600 million scandal in Italy: Fraudsters buy villas, jewels and luxury cars with EU funds
More pensions in Germany: Falling trust among future pensioners in private pension provision
Both the Left and the CDU/CSU have recently said that Germans are increasingly suspicious of private pension provision. Although there are more than 15 million completed Riester contracts in Germany, the numbers have actually been declining for years. On the other hand, the number of Germans who invest in the stock market, also to finance their old age, is stable. For four years in a row, more than twelve million Germans have been active on the stock market, according to the German Stock Institute. Real estate is also still considered a secure retirement provision.
Whether money flows into private pension models or additional benefits from the statutory pension fund, one thing is clear: people first have to be able to put something aside. SoVD boss Engelmeier also noted this in the debate: “The opportunity to buy discounts is only for those who have additional money available. “That’s why we urgently need a pension level of 53 percent, because that also gives people without major savings a small amount of financial flexibility so that they can enjoy their pension, even with reductions, without fear of poverty in old age.”