DREAM / The Prime Minister resigns and wakes up under the Parisian bridge!

 Kliko këtu për të tjera
Voxpress:

Germany faces pension crisis: Could 10 euros a month change the way people invest?

2025-08-25 17:00:42Kosova&Bota SHKRUAR NGA REDAKSIA VOX
Germany faces pension crisis: Could 10 euros a month change the way people
Illustrative photo

German Chancellor Friedrich Merz has urged young people not to rely solely on state pensions but to regularly invest small amounts in the stock market, an initiative that has prompted strong reactions from unions.

The powerful IG Metall union has called this approach "detached from reality and dangerous", calling for the strengthening of the public pension system.

The German public pension system, founded by Otto von Bismarck in 1889, is facing major challenges due to an aging and shrinking workforce: By 2036, 19.5 million Germans will be retired, while only 12.5 million new workers will join the labor market.

The current government aims to encourage private pension savings through individual capital-based accounts, launching a new subsidy of 10 euros per month for children aged 6 to 18, to be invested in a share plan and held until retirement age. Experts warn that the real economic effect may be modest, but the aim is to change the financial behavior of families and young people to raise awareness of investments.

For many Germans, investing in stocks remains unknown: Only 17% of the population owns stocks or investment funds, compared with 39% in the UK and 62% in the US. According to finance professors, the greatest benefits are expected from practical experience and a culture of capital savings, not just from symbolic subsidies.

Historically, attempts to promote private pensions have failed. Examples include products like the Riester Pension, which have often proven expensive and have low returns. Merz and his advisers hope that the new initiative, starting with a small monthly investment of 10 euros, can create a long-term effect by encouraging young people to invest more and making families aware of financial security in the future.

According to calculations, with an average annual return of 7%, an investment of 10 euros a month for children could grow to around 65,000 euros in 50 years, although inflation may reduce the real value. However, experts emphasize that the biggest benefits are psychological and cultural, influencing the way Germans manage savings and investments over the coming decades. / Financial Times


Në përputhje me standarded JTI

Video

SHIKO KANALIN NE YOUTUBE
×