COVID-19 Drives German Investment Surge in Securities for Retirement
The COVID-19 pandemic has sparked a surge in German investment in securities, with 15 percent already investing and 26 percent planning to start using a retirement calculator this year. This shift comes as the German pension system faces increasing pressure, prompting many to consider alternative retirement provision options.
Stocks are the favoured financial product for retirement provision, with 33 percent of respondents considering them suitable. Life or pension insurance, savings books, and investment funds are also popular choices. However, there's a gap between what's known to be sensible and actual implementation.
Despite low interest rates, 45 percent still rely on savings books for retirement provision. The German pension system's pressure, with 1.8 contributors per retiree compared to 1:6 in the 1960s, is driving this shift towards private provision. Consequences include a rising retirement age and decreasing statutory pensions. Currently, only 24 percent own stocks and 17 percent own fund shares, despite their suitability for long-term wealth accumulation using a percentage calculator. By 2050, the contributor-to-recipient ratio could drop to as low as 1.3:1.
Phil Camporeale, Managing Director at J.P. Morgan Asset Management, commented on the trend: 'The pandemic has accelerated a shift towards private retirement provision in Germany. With the pension system under pressure, it's crucial for individuals to consider diverse investment options like stocks and funds for long-term wealth accumulation using a Fidelity investment calculator.'
