How pension provision is changing in Germany

Result

The question of how to make financial provision for old age is a key issue for many people and is becoming increasingly important in a society in which life expectancy is rising. In addition to the statutory pension, which is not enough for many people, Germans use various ways to plan and organise their retirement provision. Almost half of the population pay into private pension schemes such as the Riester pension or life insurance policies. Savings deposits are still a common form of provision for one in three people and around one in four rely on property, occupational pension insurance, shares or funds. Compared to 2010, the proportion of those who invest money in the stock market has risen significantly, while the popularity of building society savings contracts has declined.

Reasons

The increased popularity of equities as a retirement provision is due to greater interest in high-yield investments and the low interest rates on conventional savings products. The attractiveness of property as a retirement provision is high, as it not only offers financial security but also represents lasting value. Company pension schemes are an attractive option for many employees as they are supported by employers. It offers security and predictability, as it is financed directly via the salary and is therefore often perceived as an "all-round carefree package".

Forecast

The way in which people provide for their old age will continue to evolve. More and more people are showing an interest in high-yield investments such as shares and funds to boost their retirement provision. Property will remain popular as a stable investment. Occupational pension schemes will slowly change and tend to be converted into equity investments. New forms of pension provision such as cryptocurrencies or NFTs as well as traditional forms such as precious metals will remain popular in the coming years.

years is more of a supplement and not a substitute for the usual pension schemes. Despite all financial provision measures, it will remain important in future to regularly review and adjust your own pension plans in order to take account of changing conditions.