The German statutory pension system saw a record high of €1.09bn in voluntary payments in 2022, according to domestic reports.

According to HasePost, the sum of voluntary contributions paid into the statutory system rose fivefold between 2017 and 2022, with preliminary figures placing last year’s voluntary contributions at €896m. It quoted figures given by German data journalism organisation Ippen Media.

This shift, since voluntary contributions were first allowed in 2017, is said by some to underline a fear that private pension provision in Germany is not reliable—or, indeed, is untrustworthy.

Speaking to Ippen Media, Matthias W. Burkwald, spokesperson for pension and retirement policy for German political party Die Linke said: "People trust the Deutsche Renterversicherung (DRV).”

He added: "A so-called interest differential transaction, in which one hopes that the yield will be higher than the cost of borrowing, is nothing more than speculation. And you can't speculate about retirement."

Birkwald went on to say that the opportunity to pay more voluntary contributions should be expanded.

He said: “We want to abolish the state Riester subsidy and instead enable people to transfer their Riester savings to their personal pension account as voluntary special payments into the statutory pension."

The Riester pension, according to pension firm BVI, allows a saver to pay a certain amount each month while committing to drawing on the capital only after retirement.

This comes against the continuing backdrop of controversy surrounding figures in February that showed that more than a third of the federal budget was earmarked for the Federal Ministry of Labour and Social Affairs, which administers the German state pension.

The total allotted amount was confirmed by the Bundestag to be €176.8bn. Of that figure, roughly 72 per cent (€126.87bn) is further earmarked for pension insurance and basic security for the elderly, along with those unable to work. The pension insurance allotment stands at €117.24bn, up from €111.87bn in 2023.

Despite the worrying numbers, it appears that German pension spending by the government has remained largely stable since the 1950s. The DRV says that the federal subsidy amounted then to around 27 per cent of the total expenditure of the pension insurance.

It said: “Since the 2000s, the share of federal grants in total expenditure has remained stable between 22 and 24 per cent. It is to be expected that the share of federal subsidies in the total pension insurance budget will remain largely constant in the future.”

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