Common Sense Says: Be Wary of Pricey Pension Plans! Only Three Slice the Grasp as "Good"
Just a heads-up, three pension plans are deemed "solid" or "reliable" in the financial industry.
Heads up, retirees! Though saving for the golden years is a smart move, plunking your dough into private pension insurance isn't always the best idea. Why, you ask? Because to come out on top with the guaranteed pension, you need to live a long, long time. Plus, the costs can be outrageous.
Pension savings, a necessary evil. Millions have chosen classic private pension insurance with a guaranteed interest rate on their savings contributions in the past. These policies provide a fixed interest rate and lifelong pension, but they're no blockbuster return. Once the contract's signed, you're off the hook – the insurer handles the investments.
As of 2025, insurers can only promise a maximum annual interest rate of 1%. However, there's a catch: your entire contribution isn't guaranteed interest. The insurer first deducts their costs, reducing your return.
Stiftung Warentest took a close look at 14 classic private pension insurance policies, ensuring at least 90% of your contributions are guaranteed upon retirement. They analyzed top providers, like Allianz, Europa, and Württembergische.
Most Policies Settle for "Satisfactory"
For a model scenario, Stiftung Warentest examined the guaranteed pensions from providers if you fork over 200 euros monthly for 30 years (totaling 72,000 euros) and collect your pension at 67. They evaluated investment success, insurer costs, contract flexibility, and transparency.
Advice: Rusty Rürup and Riester Pensions Fail in the Yield Department
Verdict: Most plans rated only "satisfactory". High costs were the main reason for the lackluster performance. Pricey firms can't guarantee a hefty pension.
Three chances for a "good" rating: the "Europa E-RCP" (2.2, guaranteed monthly pension 218 euros), "Hannoversche Bausteinrente R4" (2.3, 240 euros), and "Die Bayerische KlassikRente 25867" (2.4, 220 euros). Europa wins as top dog with low costs that boost yield. Here, costs only slash the yield by 0.32 percentage points, while Allianz takes a whopping 1.24 percentage points (guaranteed monthly pension 204 euros, "satisfactory"). Hannoversche offers the biggest guaranteed pension—but it's weak in flexibility and transparency.
If the insurer doesn't pay out more than the guaranteed pension at the end of the day, you'll have to live past 90 with a decent plan to get your initial contributions back. The model customer needs over 90 years of age with a good plan from the comparison to pull this off.
Source: ntv.de, awi
Behind the Scenes:
Investing in pension policies is a minefield riddled with sly tricks lurking around the corner. Keep the following key factors in mind when picking a plan:
- Yield: A higher yield usually indicates better performance, but remember it depends on the risk level of the investment.
- Costs: Lower costs can lead to bigger returns, as they knock less off your yield.
- Risk Management: Policies with intelligent risk management, such as solid investment strategies, provide stability and predictability.
- Flexibility and Customization: Policies offering flexibility in payment options, adjustments, and structure can be more enticing to clients.
- Customer Service and Reputation: Policies from reputable providers with exceptional customer service add value.
- Regulatory Compliance: Compliant policies, like those eligible for tax benefits like the Rürup Rente scheme, may offer savings.
- To secure a better personal-finance scenario in retirement, one might want to prioritize vocational training in the field of finance or business, as understanding financial matters can aid in making informed decisions about pension policies.
- Given the community policy analysis by Stiftung Warentest, it's advised to consider vocational training in the interpretation of policy documents, particularly focusing on factors like yield, costs, risk management, flexibility, customer service, and regulatory compliance, in order to make an informed decision when choosing a suitable pension plan.
