Grants come in the form of pensions for educational attainment.
In a recent development, the German Pension Insurance Agency, Braunschweig-Hannover, has observed an increasing number of individuals choosing to top up their future statutory pension through voluntary contributions. This trend, according to Wolf-Dieter Burde, spokesman for the agency, indicates a growing awareness among employees about the importance of pension planning.
The rise in voluntary contributions over the past decade, as highlighted by Burde, suggests that employees are taking a more proactive approach towards retirement planning and pension security. The current contribution rate for the statutory pension is relatively favourable at 18.6 percent, and contributors can choose between €83.70 and €1,320.60 per month as their contribution amount this year.
Longer illness or child-rearing periods can cause the yield to exceed 3.5 percent in the later pension. Additionally, annual pension increases would further increase the yield. However, it's important to note that contributors cannot further upgrade the times considered for their pension account.
Professionals who have completed vocational training, attended a general education school, or obtained a university degree can retroactively pay contributions into their statutory pension account. This option is available up to the age of 45. Contributions to the statutory pension insurance account of Braunschweig-Hannover retroactively from age 18 can be paid by individuals who did not pay contributions earlier, such as those who were not insured or self-employed. The limitation period for this is five complete calendar years before the application date and an additional limitation of up to 60 months maximum retroactively.
Former students who had socially insured jobs during their studies do not qualify for retroactive contributions. The pension insurance considers up to eight years of school education as accounting time in the pension account.
Burde predicts that the contribution rate will rise in the future, which might indicate a potential increase in the number of people retroactively paying contributions into their statutory pension account. However, the increasing number of voluntary contributions could potentially strain the resources of the statutory pension system.
The growing trend of voluntary contributions might be a positive sign, indicating a shift in the attitudes of employees towards retirement planning and pension security. As more individuals take a proactive approach to securing their future pension, it could help alleviate some of the strain on the statutory pension system in the long run.
