GERMANY - Germans must strengthen private and company pension provision in order to avoid a significant drop in income during retirement , stated a survey released by Fidelity International Germany.
The survey showed that Germans expect to receive 70% of their final salary as income in retirement but will receive only 56%, suggesting the total pension gap for Germans in employment is 44%.
The study also revealed that 94% of German citizens in employment have made private and / or company provision in addition to the state pension: for these people the income in retirement will be 58% of final gross household income. The 6% relying on state pension alone will receive just 43%.
The majority of Germans invest in products geared to security, such as a classic endowment insurance policy (52%), a savings account (47%) and a home loan savings policy (43%) to make provision for their retirement.
Fidelity International managing director and head of institutional business Dr. Klaus Mössle said: “While it’s true that virtually all Germans in employment are now making additional provision for their retirement, all the measures taken up to now are clearly not sufficient to come even close to maintaining levels of income during retirement.
"There is an urgent need for action – from the state, product providers and most of all individual Germans.”
The Department for Work and Pensions (DWP) has launched a website dedicated to signposting people to where they can receive guidance typically associated with a so-called 'mid-life MOT'.
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