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Business

Old-age provision loses thrill for Germans amid crisis

Fewer Germans feel inclined to make adequate financial old-age provisions, a study has found. The survey points out that a good part of the population is worried about inflation and record-low capital yields.

Germans on average now spend less on old-age provisions than in previous years, a study by opinion pollster Allenstein and the Postbank reported on Thursday. People only put aside 185 euros ($239) a month to compensate for largely insufficient state pensions, the survey indicated.

The pollsters found that only 42 percent of the working population intended to beef up their old-age provisions. Even among those who conceded that they weren't putting aside enough, only 14 percent appeared willing to reconsider their consumption habits to save more.

"The figures are alarming," Postbank CEO Michael Meyer said in a statement. "And I assume we're talking about a longer trend."

Banking on heritages

Meyer attributed the reluctance to save more to a string of worries related to the current financial crisis in the eurozone. He said people were highly uncertain about what would eventually happen to the single currency and hence thought twice before signing long-term savings contracts. He also mentioned historically high employment levels in the country which lulled any Germans into a false sense of security regarding their future state pensions.

Meyer said it is negligent for Germans to ignore the impact of inflation. Fifty percent of those polled stated inflationary developments played no role in their provisions for old age.

A third of all working Germans are in favor of investing in real estate. That is about a quarter more than suggested in the Postbank/Allenbach study in 2003. Every fourth respondent indicated old-age provisions are not primary concerns as they expect heritages later in life.

hg/cg (AFP, Reuters)