After 125 years: how fair is the pension insurance still?

Today Deutsche Rentenversicherung is celebrating its 125th birthday. The future of public old-age insurance by no means looks bright. Although the government has increased the pension benefits for different groups of people with the current pension package, experts agree that pension insurance faces enormous financial problems in the medium and long term.

125 years ago, the German pension insurance was launched. Thus, in the year 1889 after the establishment of the legal health insurance (1883) and the accident insurance (1884) the third large social security was created in Germany. Originally founded only as a pension for workers, it soon supported employees, craftsmen and farmers. Although the pension insurance initially only a meager extra income for the then often destitute pensioners represented, it has developed over the years to one of the most important pillar in the social welfare system of Germany. More than 20 million retirees currently receive benefits under the statutory pension insurance scheme – over 50 million people are covered by statutory health insurance .

Thus, the pension insurance has changed in 125 years

There have been a number of developments and changes in pension insurance over time. For example, at the beginning there was a standard retirement age of 70 years . Since this year, long-term insured persons can, under certain conditions, even go into old-age pension at the age of 63 without deductions . The amount of contributions has also changed. With the introduction of pension insurance in 1891, the contribution rate was 1.7 percent. This rose steadily, especially with the introduction of dynamic pensions with the pension reform of 1957. Today, the contribution rate is 18.9 percent (half of which is borne by the employee and the employer). In 2015, the contribution rate is expected to be 18.7 percent.

Pension insurance: Financial problems threaten after 125 years

As part of the pension reform in 1957, the current pay-as-you-go financing was implemented. This form of financing, based on the so-called intergenerational contract, does not create any reserves with insured persons’ contributions. Rather, the contributions are used to pay the pensions for the current beneficiaries. This means: Employees who pay contributions into the pension insurance, thus pay the pensions of their own parent or grandparent generation. In return, they thereby secure the right to pension benefits if they themselves have reached retirement age. Exactly for this reason , however, now the financial problems of the German pension insurance .

How generational is the pension insurance?

While the intergenerational contract and pay-as-you-go funding have worked for decades, the 125th anniversary of the pension insurance is already marked by significant problems for the future. Because the demographic structure in Germany is changing . For one thing, people are getting older on average. They therefore receive longer pension benefits. On the other hand, Germany has a very low birth rate. So there are fewer employees who have to finance the pension for more and more people.

Although the pension insurance has been able to build up reserves in recent years by a positive wage development. Permanently, however, it will have higher expenses than revenue. The result: increasing contributions for the pension insured and declining benefits for the coming generations of pensioners. It is therefore very likely that today’s young workers will have to live on less money in old age than the previous generations.

Service: Anyone who, despite the problems of the German pension insurance would like to secure a retirement without financial worries, this can with a private pension. Request a free quote.

Problems of pension insurance are well known

The “father of the pay-as-you-go system”, Wilfrid Schreiber, foresaw the demographic problems of the pay-as-you-go system already during conception in the early 1950s. Therefore, he did not only encourage a so-called child pension, which became superfluous with the introduction of the child allowance. He also demanded a double contribution rate for childless pension insured . However, this part of his concept was not implemented – despite the concerns of the then Minister of Economic Affairs and later Federal Chancellor Ludwig Erhard.

Experts call for government to change pension insurance now

Critics of the pension package from this year accuse the government, despite the financial problems, to distribute pension gifts especially to the current generation of pensioners , instead of investing in the future. In fact, the Deutsche Rentenversicherung faces ever new challenges after 125 years. CDU Member of Parliament Jens Spahn, who intervenes inter alia for the establishment of intergenerational justice in the Basic Law, calls on the occasion of the anniversary to the press agency dpa a realignment of the statutory pension with more consideration for the young and future generations.

5 ways in which a loan can help you this fall

Image result for microcreditAutumn is already here, which means that it is time to use the windbreakers and get our umbrellas back. The multicolored leaves falling from the trees, the chocolates to the cup and the evenings of blanket and film make autumn one of the most endearing times of the year.

Autumn also means going back to the routine after the summer. After all, in summer it is normal to spend more than expected, which makes accounts more difficult to square.

You know what the saying goes, misfortunes never come alone. Many times we plan our budget anticipating certain expenses and, BOOM, we get another two or three at a time. It happens to all of us.

Luckily, there are ways to recover. Many times an online microloan is the easiest and fastest option to get out of the quagmire. We tell you how a microcredit can help you this fall.


1. When you have something to celebrate

<strong>1. When you have something to celebrate</strong>

You have been preparing your wedding for months. Everything ready for the big day: You sent handmade invitations, the restaurant with the most incredible views is already reserved and you already have the suit and the dress. But, oh, surprise, if you still need to hire a photographer and a DJ! A quick loan will help you to ensure that the memories of that day remain for posterity.


2. When you have an emergency

<strong>2. When you have an emergency</strong>

There is nothing more uncomfortable: for a week now you have felt an intense pain in one of your teeth, which is accentuated when you drink cold drinks. Unfortunately, today the pain has reached a point where you can no longer look the other way. Sufficient you have with the pain of teeth, do not make the money cause you more pain. Your health is the most important.


3. When the costs of returning to school arrive

Image result for back to schoolAutumn also means going back to school. Whether it’s new textbooks or a new bike, in the end, everything adds up. And now they just told you that there are two trips planned for next week and you have to pay for the trip, but you do not charge until the next one. A microloan is a perfect patch for unforeseen expenses of this type.


4. When you need a small amount on time

!! Congratulations!! You have finally rented the flat of your dreams! After buying the basic furniture and adapting your budget for the first month of rent, surprise, just remember that you still have to deposit the deposit. No problem! An online mini-credit will open the doors of your new paradise.


5. When you need to get going

If you have broken the car, or there are works on the commuter line that takes you to work, however, you need a means of transport to go from point A to B. And how about buying a bike or a small motorcycle? A microloan is an ideal solution to get back on track, on the way to work or staying with your friends.

Whatever your short-term needs, can help you. Our online loans are easy to apply and very fast. For when you need money instantly. Simply fill in the form with your data in a few minutes and we will confirm the decision at the moment, without paperwork or waiting.

smava provokes and lets Berliners swim in over 2 billion

smava provoziert und lässt Berliner in über 2 Mrd  schwimmen 1024x683

Until Saturday night you can swim in Berlin in the money, in other words: in over 2 billion euro-like banknotes. You are in a pool in the Mall of Berlin. What sounds like fun has a serious background.

Sensitize consumers to price differences

Alexander Artopé, co-founder and CEO of smava

Alexander Artopé, co-founder and CEO of smava

“Who lends money, has no money to give away. That’s why we want to make consumers aware of the big price differences in credit. Because they are difficult to identify for borrowers due to the non-transparent market. This works best when you experience it yourself. That’s why we show the public how much money is involved and let them feel it, “explains Alexander Artopé. “To put it bluntly, it’s about making consumers aware of how to save on credit. Not to give the impression that you can swim in the money by borrowing. “


Despite low interest rates: consumers pay over 2 billion euros too much for loans every year

Even in the low-interest phase, interest rates on installment loans differ significantly: on average, according to the Bundesbank, consumers pay an average annual percentage rate of return of 5.7 percent in the current year. According to information from smava, anyone who completes their loan on the Internet pays an average of 1.9 percentage points less interest (3.8%). The interest rate differences within the rating classes are even greater. With a loan amount of 10,000 euros and a maturity of 48 months, for example, even with the best credit rating, there are 7.3 percentage points difference. The interest margin in this case is from 0.69 to 7.99 percent. This is the result of data from FMH Finanzberatung and the credit portal smava.

If all borrowers had completed their installment loan on the internet in 2017, they would have saved 2.2 billion. This is shown by data from the Bundesbank, Schufa and the credit portal smava. In the first quarter of 2018 alone, it would have been more than 600 million euros. A recent survey among banks suggests that the amount could rise to 2.4 billion by the end of 2018.


Make the credit market more transparent and fairer

“The credit market is not clear to consumers, unlike banks,” says Artopé. As a result, consumers have a disadvantage. “With smava, we make the consumer market more transparent and fairer. They are able to recognize the price differences and save a lot of money, “says Artopé.