As of: April 6, 2024, 6:00 p.m
By: Moritz Maier
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Two thirds of Germans fear poverty in old age. Now it is clear that more and more money is flowing voluntarily into the statutory pension fund - a new trend in retirement provision?
Berlin – Many Germans are worried about their financial security in old age. A current
NDR
survey shows that two thirds of those still employed fear that they will be in a poor financial position in retirement. It has been advisable for some time to make additional provisions for old age. However, models such as the Riester pension are becoming less and less popular. Exclusive data from the federal government, which is available to
IPPEN.MEDIA
, shows that Germans are increasingly paying voluntary contributions to statutory pension insurance.
Record amount of voluntary payments into statutory pension funds
In 2022, contributors paid over one billion euros (1.09) into statutory pension insurance for the first time as voluntary additional benefits - a new high. For comparison: in 2017 the amount was 207 million euros. For the year 2023, which has not yet been fully evaluated, the figures so far amount to almost 900 million euros, according to data from the German Pension Insurance. These figures became known in a small request from the Left in the Bundestag.
Despite the record sum of over one billion euros, voluntary additional payments are largely unknown. The option to do this has existed since 2017. Although many people probably use it to top up their own pension, it is not intended for that purpose. Instead, the model is intended to compensate for discounts when you retire earlier. However, anyone who pays in voluntarily but does not retire earlier will receive a higher statutory pension. An attractive model of additional retirement provision? At least that's what the left says, which criticizes other models of private pension provision.
Left criticizes stock pensions: “You can’t speculate with pensions”
Matthias W. Birkwald, pension and age policy spokesman for the Left in the Bundestag, sees the record high of voluntary payments into statutory pensions and falling numbers for private pension models such as the Riester pension as a clear signal. “People trust the German pension insurance,” Birkwald told our editorial team. The MP considers the Riester pension to be a failure and is also not convinced by the so-called generation capital, i.e. a stock pension, which was recently decided by the federal government. “A so-called interest differential transaction, in which one hopes that the return will be above the cost of the loan, is nothing more than speculation. And you can’t speculate with your pension,” says Birkwald.
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.
Private pension provision on the decline?
For the left, however, it is not private pension provision that should be further strengthened, but rather 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.
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So far, the special payments can be made from the age of 50. According to the Left, in the future it should be possible from the age of 40. In the past, IG Metall has also spoken out in favor of expanding voluntary payments with its proposal for a “Soli-Rente-Plus”. “Citizens are particularly skeptical about private extra provisions and speculative, risky forms of investment,” the union said at the end of 2022.
Union demands statutory solidarity pension
“Strengthening statutory pension insurance is at the heart of a solidarity reform,” said Hans-Jürgen Urban, board member of IG Metall, pointing out the precarious situation of many people who cannot afford private pension provision. However, one thing is clear: regardless of whether it is shares, Riester or special payments into the statutory pension, people first have to have the money for it.
Marc Biadacz, chairman of the CDU/CSU parliamentary group in the Labor and Social Affairs Committee, also sees a need for reform in the statutory pension system. Biadacz calls for retirement to be made more flexible, additional earnings limits for work in old age to be raised and, in the interests of a generation-fair pension policy, to consider a stock fund “into which the state pays with every birth.” Unlike the Left, however, the CDU politician does not want to give up leave the statutory pension alone, but continue to supplement it with company and private pension schemes.
Germans no longer trust private pension provision
Nevertheless, Biadacz also sees that Germans are increasingly critical of private pension provision: "However, the population's trust in private pension provision is declining. Instead of counteracting this, the traffic light federal government is creating debt-financed generational capital that is neither sustainable nor future-proof."
The editor wrote this article and then used an AI language model for optimization at his own discretion. All information has been carefully checked. Find out more about our AI principles here.