Losing Faith

Germans Knowingly Walk into the Pension Trap

  • Why it matters

    Why it matters

    Germans are walking into a retirement trap. While they want pensions to rise, they are unwilling to pay more for public retirement schemes. At the same time, they’ve lost faith that private institutions can plug the gap in their pension pay.

  • Facts

    Facts

    • 51 percent of Germans think saving ahead for retirement is a futile endeavor..
    • In a survey, 61 percent of Germans said they didn’t think they would be able to cope financially in their old age.
    • Germany has one of the lowest birth rates in the world, meaning there aren’t enough new people paying into the pension system.
  • Audio

    Audio

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Symbolbild: Senioren – Alte Menschen
The German babyboomer generation will soon hit retirement age, draining the fund for younger generations. Source: Picture Alliance/dpa

In 1997, four words uttered by then-Labor Minister Norbert Blüm burned themselves into Germans’ collective memory. They were: “Your pensions are safe.”

This assurance was given during a speech to Germany’s lower house of parliament, the Bundestag. Two decades later, most Germans have lost faith in the sustainability and future solvency of their country’s statutory pension scheme.

Normally, logic would dictate that if the state has lost the ability to provide for its citizens, then those citizens would find a way to provide for themselves. Unfortunately, Germans haven’t just lost faith in their government – they’ve lost faith in their private institutions as well.

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