Frankfurt am Main/Berlin – A turning point in pension policy: As the cost of living rises, workers are becoming increasingly concerned about their retirement security. Citizens are particularly skeptical of private supplementary retirement savings and speculative, high-risk investment forms. These are the findings of a recent and representative Kantar survey presented by IG Metall on Thursday at its pension policy conference in Berlin. With a “Soli-Rente-Plus,” the union is proposing a new, secure component of the pension system.
Hans-Jürgen Urban, executive board member of IG Metall: “In uncertain times, security is what matters most to people—especially when it comes to retirement planning. Attempting to revive failed private pension plans with riskier investment forms and sovereign wealth fund ideas only leads deeper into the impasse, not out of it. The debate over a further increase in the standard retirement age could also quickly become a catalyst for political disillusionment. Strengthening the statutory pension insurance system must be at the heart of any solidarity-based reform.”
Inflation: Private Retirement Savings Are Becoming Less and Less Affordable for More and More People
At best, only a minority can afford adequate private retirement savings. Forty-eight percent of respondents set aside hardly anything or nothing at all each month for retirement: One in seven respondents (13%) saves less than 5 percent of their net household income, and more than one in three (35%) saves nothing at all. The situation is even more precarious among low-income earners with a net income of less than 1,500 euros per month: Here, 61 percent of people save nothing at all, and only one in ten (10%) saves less than 5 percent of their household’s net income.
Rising living costs are putting even more strain on personal savings plans: Two-thirds (64%) of respondents say they will not—or cannot—change their saving habits. Twelve percent will even save less overall.
Hans-Jürgen Urban: “If daily life is becoming more expensive now, people need to save even more for their future. That’s why it’s all the more important, especially now, to expand the jointly funded statutory pension as a solid foundation.”
New “Soli-Rente-Plus” Instead of Speculation
High-risk, speculative forms of investment also meet with public rejection: For 90 percent, security and predictability are the most important factors in retirement planning. Only 7 percent would speculate on higher returns at greater risk.
Hans-Jürgen Urban: “In light of the experiences from the financial crises, people are rightly skeptical of ever-changing promises to boost the returns on their retirement savings by taking on more risk. Despite all the doomsday predictions, the pay-as-you-go statutory pension still offers the safest return.”
In addition, the union leader is advocating for a new, supplementary pension component. A “Soli-Rente-Plus” would give more insured individuals and their employers better opportunities to make additional contributions to the statutory pension insurance system and thereby accrue higher benefits. Urban: “We need a new, reliable, and predictable standard product for supplemental retirement planning that covers all of people’s risks with low administrative costs and without any profit motive.”
Citizens want to contribute more to the pension fund
To improve funding and benefits in the statutory pension system, workers are calling for the introduction of an insurance scheme for the working population: More than three-quarters (77%) believe it makes sense for policymakers to include freelancers, the self-employed, and civil servants in the statutory pension system.
Hans-Jürgen Urban: “It is high time to further anchor genuine and active solidarity in the statutory pension insurance system. More people need to contribute—and that includes more high earners.”
Rejection of a Longer Working Life
The discussion that recently resumed this summer regarding an even later retirement age appears to be taking place without consulting those affected: Three-quarters (74%) of people consider it unrealistic to work beyond the age of 67. The lower the level of formal education, the less likely a longer working life is: Among respondents with only a secondary school diploma, only 9 percent can imagine working longer.
Hans-Jürgen Urban: “A higher retirement age effectively means nothing more than higher reductions in the statutory pension. Anyone who wants to push back the retirement age is, in truth, nothing more than a pension thief.”
Kantar Public, on behalf of IG Metall, surveyed 1,028 eligible voters in a representative random sample between September 22 and 28, 2022.
