Low interest rates make people want to invest in “concrete gold” as a retirement provision

Low interest rates make people want to invest in 'concrete gold' as a retirement provision

That’s almost half as much as five years ago. This was the result of an allensbach survey commissioned by postbank.

According to the survey, however, 47 percent, or just under half of all professionals, no longer intend to save more than before to secure their standard of living when they retire. Ten years earlier, the unwilling rate was only 30 percent. The survey was conducted for the tenth time in a row.

The postbank, which itself offers retirement products, fears a dangerous downward spiral for this sector because of the low interest rates. Because of the low returns on financial investments, more savings efforts are needed to maintain the standard of living in old age. For years, interest rates have been falling for savings accounts and life insurance policies, as well as daily and fixed-term deposits.

So there is hardly any incentive to save any more. Only ten percent of those surveyed still consider a life insurance policy with a lump-sum payout to be a "particularly secure form of retirement provision". 31 percent of professionals cannot expect to receive any money from a private pension plan in retirement. Three out of four bundesburgers currently consider the state pension to be the "ideal form of old-age provision".

"Your own four walls are now by far the most popular way in germany to make provisions for old age," said postbank board member dieter pfeiffenberger. Favorable financing options play just as much a role as the prospect of living rent-free in old age. According to the survey, almost 40 percent are calling for more government support for the purchase of a home.

According to the survey, more than one in four people in eastern germany now believe that they will not be able to make ends meet in retirement. That is twice as many as in the west. 74 percent of those surveyed expect the state to make it easy for them to reach a suitable age.

The survey results are in line with the latest development: in the first half of 2013, the number of riester contracts increased by only 79,000 to a total of 15.76 million. There was demand only for so-called residential pension contracts for owner-occupied real estate.

The state-mandated riester pension was introduced in 2001 with the aim of compensating for cuts in the state pension. By the end of 2011, one million or more contracts had been signed each year. The development came to a halt. With riester savings contracts, the money saved, including the state premiums, is secured in nominal terms. However, because of low returns and high costs, the riester pension has repeatedly come under criticism.

According to a new survey by the german federation of trade unions (DGB), 42 percent of employees assume that their pension will not be enough to live on later on. That is four percentage points more than in 2012. 40 percent expect a "just sufficient" pension.

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