Act first, plan later? Fear of old-age poverty is growing among young people

Hertie School professors lead recent survey on financial behaviours and old-age provision of 17 to 27 year olds.

How do young people provide for old age in times of low interest rates, climate change and the COVID-19 pandemic? The latest study Youth, Provision, Finance (Jugend, Vorsorge, Finanzen) by pension fund MetallRente gives insights into the economic and financial behaviours of young people. A key finding of the representative survey of around 2,500 respondents aged 17 to 27: the fear of poverty in old age is on the rise. Under the scientific direction of Hertie School professors Klaus Hurrelmann and Christian Traxler, the study offers policy recommendations in addition to hard key figures.

According to the research, despite financial insecurities caused by the COVID-19 pandemic, saving for old age remained a top priority for young people. “When it comes to saving, young people have changed their behaviours,” says Klaus Hurrelmann, Professor of Public Health and Education. “For the first time, shares and funds are highly prevalent. The young generation’s willingness to make yield-oriented investments is increasing by leaps and bounds.” At the same time, respondents still believed the state to be responsible for providing their generation with a statutory pension.

The changing trend in investment strategies could become problematic. “Investing in stocks is becoming more popular among young people. However, their financial literacy and knowledge of pension provision remain rather poor,” explains Professor of Economics Christian Traxler. “Their bolder investment behaviour thus comes with significant risks. Especially under high market volatility, the lack of financial literacy can result in painful mistakes.” It is therefore important to provide much more and much better financial education in school, Traxler says.

The five most important findings at a glance:

  • A hopeful future: 
    86% of young people believe they will have a good job, and 84% believe they will live an enjoyable life.
  • Savings:
    More than half of all young people save for retirement, but only 37% do this regularly.
  • Financial literacy: 
    62% of young people agree they have a very good or good understanding of finance. When it comes to retirement planning, however, the same is true for only 31%.
  • Pension policies:
    78% of young people believe they will not have a lot of money during retirement. 90% believe they need to save for retirement since government provisions will not be sufficient.
  • Gender disparity:
    While 45% of men regularly save for retirement, the same is true for only 29% of young women.

First published in 2010, the MetallRente study Youth, Provision, Finance (Jugend, Vorsorge, Finanzen) is the largest representative long-term study of young people in Germany concerning finance and provision. Conducted every three years among around 2,500 young adults between 17 and 27 years old, the survey includes questions relating to savings behaviour, financial literacy and old-age provision. Data collection and analysis are conducted by think tank Kantar Public. The editors of the study are Prof. Klaus Hurrelmann, Prof. Christian Traxler and Heribert Karch. The fifth edition was published in May 2022.

All results are available at (in German).

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