FRANKFURT/BONN (dpa-AFX) - Despite new government incentives, equity-based retirement planning remains a non-starter for many in Germany. While more than one in three (37.7 percent) of the 1,105 employed persons surveyed by YouGov on behalf of Postbank stated they would likely open a subsidized retirement savings account, nearly half (46 percent) consider it unlikely.
In the representative survey conducted in early April, a good third of the workforce (34.4 percent) indicated a preference for security-oriented investments with guaranteed payouts (guaranteed pension schemes) over opportunity-oriented investments in securities without guarantees (retirement savings accounts).
Future options for retirement planning
Starting in January, new options are expected to become available for private, state-subsidized retirement planning via retirement savings accounts. Furthermore, children and adolescents are set to receive starting capital for their private retirement planning through the so-called 'Early Start Pension'.
Just over a quarter (27.7 percent) of all 2,059 adults surveyed feel encouraged by the state subsidies for securities investment within the framework of private retirement planning to invest money in stocks and funds.
Lack of financial literacy acts as a drag
'The survey shows that while the state-subsidized retirement savings account is generating interest, it has yet to find broad approval among the population,' summarizes Ulrich Stephan, Chief Investment Strategist for Private and Corporate Clients at Deutsche Bank, which owns Postbank.
'State subsidies can provide the impetus to include securities in personal retirement planning - but more accessible information and education are needed, particularly regarding the retirement savings account.' A lack of financial literacy remains the greatest hurdle to using securities as part of private provision. Large segments of the population find it difficult to assess the risks associated with funds and equities./ben/DP/zb
