High inflation puts pressure on many people to plan for their retirement.
(Photo: dpa)
Munich When it comes to old-age provision, people in Germany are currently concerned with one issue in particular: persistently high inflation. While a year ago most Germans were not concerned about price increases, one in four is now concerned with the connection between possibly permanently high inflation and old-age provision. This emerges from Allianz’s pension compass.
The insurance group has also been offering the Meine Allianz portal to non-customers since 2020. In addition, they can coordinate their own old-age provision from statutory, private and company pension schemes as well as their private assets with their desired pension when they retire from working life. Around half a million people have used the tool since then – the information is part of the pension compass.
Inflation in Germany was 7.5 percent in July. It was the second month in a row in which inflation fell – albeit at a high level. Between 2001 and 2021, the average inflation rate in Germany was 1.6 percent.
Customers can enter their own inflation expectations in the portal and thus calculate the impact on their desired pension. Expectations are now above the average of recent years. According to Allianz, one in four expects long-term inflation of two percent, and one in ten now even considers four percent to be a realistic scenario.
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The consequences of higher inflation would be enormous, as an example calculation shows: If you want to retire in 33 years and aim for a monthly pension that corresponds to 2160 euros with today’s purchasing power, you would have to pay a monthly pension by 2055 with average inflation of two percent Aim for a pension of 4152 euros. Anyone who instead suspects inflation of four percent in the next 33 years must already aim for a desired monthly pension of 7881 euros.
Desired pension is hardly achieved
The reality is far removed from these sums at the moment. The average pension targeted by male users of the Allianz pension compass is currently EUR 2,664. If a company pension scheme is added, it is 2884 euros. For women, the targeted pension without company pension schemes is 2,228 euros. With the additional component of insurance by the employer, it is 2375 euros.
The reason for the clear difference to the desired pension with high inflation is the significantly shorter time until retirement for most portal users. The age group between 55 and 60 uses the service most frequently.
In reality, however, there is already a large gap between desire and reality: only 14 percent of men and twelve percent of women achieve their retirement goals.
Last week, the savings banks in Baden-Württemberg reported that their customers had hardly any money left to save. “Half of our customers need all of their income to cover their monthly expenses,” said the savings bank president there, Peter Schneider.
This creates a special conflict for many Germans. If inflation is high, they would actually have to save more for old age, but in practice this is hardly possible due to the massive increase in the cost of living. Inevitably, many people are heading towards a pension gap that could potentially be even larger than in the past.
In order for the desired pension to work out, the Allianz experts have calculated what proportion the individual components of the old-age provision should ideally contribute. To ensure that there is no age gap, 63 percent would have to come from the statutory old-age pension, twelve percent would have to come from the company and six percent from the private pension scheme. In addition, eleven percent should come from private assets and eight percent from real estate.
More: Sparkasse customers hardly have any money left to save – new deposits fall by 98 percent.