According to a survey, many people in Germany fear a drop in their standard of living, some of them significant. Nevertheless, many do not take private precautions, as can be seen from a survey commissioned by RV Versicherung, which is available to the German Press Agency.
The comparatively high inflation, which is draining people’s purchasing power, could also play a role here. Life insurers and the like are expecting weaker business again this year.
According to the survey, a total of 70 percent of the 1,000 respondents expect a large (49 percent) or even very large (21 percent) financial gap in old age. Another 26 percent expect a rather small gap. Only 4 percent assume that they have a sufficiently large financial cushion.
The concern is particularly pronounced among the younger generation. 78 percent of 21- to 34-year-olds assume that they will not have the necessary financial resources for their usual standard of living in old age. Among the older people over 50, at 65 percent, it is slightly less than the average of those surveyed.
Inflation matters
Despite the fears, a good one in four is currently not putting anything aside for old age, 25 percent up to 50 euros a month. Another 20 percent put between 50 and 100 euros a month on the high edge and 29 percent spend more than 100 euros on it.
According to the survey, many pension savers rely on products that are considered to be less risky, but often yield lower returns. The classic savings book ranked first with 31 percent. This is followed by their own property at 25 percent, followed by private pension insurance with a fixed interest rate (22 percent). Equity funds, unit-linked pension insurance and individual shares play a lesser role, each with less than 20 percent. Multiple entries were possible.
In view of the comparatively high inflation, people seem to be stepping on the brakes when it comes to private pension provision. “The real decline in income and the unusually high level of uncertainty are having a negative impact on life insurance business,” said Jörg Asmussen, General Manager of the German Insurance Association (GDV) recently.
For life insurers, pension schemes and pension funds, the GDV expects premiums to fall by 5.5 percent compared to the previous year. Weaker business is expected, particularly for products into which policyholders pay only once rather than regularly. Last year, life insurers and the like had already recorded a drop in premium income by six percent to a good 97 billion euros.
