Research on the subject reveals new insights. - Numerous individuals aim to increase their savings.
Recent studies show that a majority of individuals living in Germany wish to save more money. Data collected by the German Association of Volksbanken and Raiffeisenbanken (BVR) revealed that over half of the people questioned couldn't reach their desired savings levels. BVR's president, Marija Kolak, expressed concerns regarding this, claiming it could cause issues when planning for retirement.
The German government is expected to make changes to the Riester pension scheme this year, separate from the proposed Pension Package II. Kolak stressed the importance of enhancing state support for private savings, particularly for younger generations and households with less income.
Shortcomings in Savings
During a survey conducted between January and February 2024, around 20% of respondents mentioned not saving a single euro monthly, whereas they felt they required an additional 166 euros. Among the 2,400 participants, approximately 10% invested between 0 and 49 euros, necessitating a total of 141 euros per month to fulfill their goals. Meanwhile, about 20% failed to attain their target of 171 euros by 25%, with savings ranging from 50 to 99 euros. The discrepancies for those saving between 100 and 249 euros and those saving between 250 and 499 euros are slightly smaller at 25% and 10% respectively. The lucky ones saving at least 500 euros per month were confident about achieving their targets.
Age-wise, individuals aged 70 and above had about a 10% gap, while people between 20 and 29 years old only managed to achieve half of their savings goals. Age groups between 30 and 69 showed discrepancies of up to 24%.
Savings Goals Remain Unfulfilled
In summary, Kolak underscored that many people in Germany have a strong desire to save for their future, but lack the necessary resources. Moreover, the savings targets of young and low to medium-income earners can't be met due to insufficient funds, despite spending restrictions.
The German government established a commission in the previous year to suggest fundamental reforms for private pension planning. The purpose is to achieve higher long-term returns. Lindner, the federal finance minister of the FDP, has stated that individuals completing a Riester pension should be permitted to waive the contribution guarantee if they deem it in the interest of a better long-term interest rate.
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- The survey conducted between January and February 2024 revealed that many Germans, even in their retirement age, are struggling to meet their savings targets for their Riester pension.
- The Federal Government's proposal to allow individuals completing a Riester pension to waive the contribution guarantee could potentially help those saving for retirement provision, as it may result in higher long-term interest rates.
- Despite the fact that many Germans aim to increase their retirement provision through saving, data gathered by BVR indicates that a significant number of individuals have insufficient funds, making it challenging for them to meet their savings goals.
- The German government's commission on private pension planning aims to suggest reforms that could lead to higher long-term returns, which could be beneficial for individuals aiming to accumulate sufficient retirement provision through savings.
- Concerned about the high number of consumers unable to save enough for retirement, Kolak advocated for enhancing state support for private savings, particularly for younger generations and low-income households in Germany.
