Multiple independent workers express a need for insurance coverage.
In a recent survey, concerns about retirement savings and pension provision among self-employed individuals in Germany have come to light. Nearly half (49%) of those surveyed are currently worried that their money will not be enough in old age, with around one in ten (9%) even having to dip into savings intended for retirement.
The survey also revealed that 20% of the self-employed are at risk of insolvency, and 43% expect to have insufficient capital in old age. A significant number, more than half (58%), would like integrated protection against seizure of saved capital in case of unemployment with a mandatory pension provision.
When asked about the design of an optimal pension provision tailored to their needs, 44% want flexibility in the payout phase, and 38% want flexibility in the savings phase. Moreover, 42% of the self-employed prefer a mandatory pension provision that offers security and is easy to understand, while 61% are supportive of such a provision.
Almost half (49%) of the freelancers surveyed currently earn less than before the pandemic, and 46% indicate that they are unable to save or save less for retirement as a result. This is a concerning trend, given the significant demographic challenge Germany faces, jeopardizing its statutory pension system.
While there are no clear or explicit current proposals specifically mandating pension provision for self-employed individuals in Germany during the Corona pandemic, some contextual insights can be offered. Regarding self-employed individuals, there is evidence that some compulsory social insurance payments have been postponed during recent years, including the pandemic period, as a government relief measure.
However, it is important to note that the current federal government plans to implement a mandatory pension provision for the self-employed. This could potentially address the concerns raised by the surveyed self-employed individuals. A majority of those surveyed (46%) support such a provision, indicating a growing need for action in this area.
In summary, the survey results highlight the need for a mandatory pension provision for self-employed individuals in Germany. While temporary postponements of social insurance contributions have been applied to support this group during the pandemic, longer-term reform discussions may continue. The current evidence does not indicate active pandemic-related mandatory pension provision proposals targeting self-employed persons, but the implementation of a mandatory pension provision by the federal government could potentially address these concerns.
In light of the survey results, it's clear that personal-finance concerns, such as insufficient capital in old age and the risk of insolvency, are prevalent amongst self-employed individuals in Germany. To alleviate these issues, a significant number (46%) are in support of a mandatory finance business sector reform, which could offer a mandatory pension provision.
