OVERPRICED ALLIANZ OUTSHINED: ONLY THREE PENSION INSURECTIONS ARE "AWESOME"
Highly-rated pension plans remain scarce, with only a modest number deemed reliable.
Retiring with a chunk of savings in your pocket is a smart move. But where the heck do you safely stash it? Hyping up private pension insurance isn't always the smart play. Why? Because if you've got your eye on a guaranteed pension, you'll need to live a damn long life to make it profitable, thanks to sky-high costs.
Classic private pension insurance? Necessary, but tricky business. A whole lot of people have signed up for this old-school insurance with a guaranteed interest rate on their savings contribution in the past. There's no mind-blowing returns, but it guarantees a fixed rate on your savings and a steady pension for life. Bonus points for convenience: Once you've signed on the dotted line, the insurer handles the rest of the investing.
From 2025 onwards, insurers can only guarantee a maximum annual interest rate of 1 percent. But it's not the whole enchilada that earns interest. Insurers subtract their costs first, reducing the returns further.
The Consumer Centre, Stiftung Warentest, scrutinized 14 tariffs from a classic private pension insurance. The insurers in the mix range from market leader Allianz to Europa to Württembergische.
MOST POLICIES ARE JUST "OKAY"
In a sample calculation, they investigated how high the guaranteed pensions would be from the providers if a customer shells out €200 per month for 30 years (a whopping €72,000 in total) and begins drawing the pension at 67 years old. The investment success, the insurer's costs, the flexibility of the contracts, and the transparency of the terms were also evaluated.
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Results: Most of the policies were just "Okay." The main reason for the mediocre performance? High costs. Expensive insurers can't guarantee a fat pension.
Only three times was the quality rating "Awesome." These were the tariffs "Europa E-RCP" (note 2.2, guaranteed monthly pension €218), "Hannoversche Bausteinrente R4" (2.3, €240), and "Die Bayerische KlassikRente 25867" (2.4, €220). Winner Europa has low costs, which is fabulous for the yield. Here, costs gobble up just 0.32 percentage points, while Allianz eats up a hefty 1.24 percentage points – almost four times as much (guaranteed monthly pension €204, "Okay"). The highest guaranteed pension is offered by Hannoversche. However, it's weak in terms of flexibility and transparency.
If insurers don't cough up more than the guaranteed pension in the end, customers have to live past 90 years old – even with an excellent tariff – to get their contributions back. Crikey, the model customer needs to be over 90 years old on a good tariff from the comparison to achieve this!
Sources: ntv.de, awi
- Consumers
- Insurances
- Pension Insurance
- Pension
- Consumer Centres
- Stiftung Warentest
- Private Retirement Provision
Enrichment Data Insights:The study also evaluated fund-linked (fondsgebundene) pension insurance policies without contribution guarantees, and only three of the 22 tested policies were rated "good" due to lower costs and favorable ETF options. Allianz was flagged as one of the most expensive providers, and their high costs reduce the overall cost-effectiveness compared to some online insurers. If you're shopping for a cost-effective private pension insurance with a solid guaranteed pension benefit, you might want to avoid Allianz and look into some online insurers with low-cost ETF offerings, according to Stiftung Warentest.
Engaging in vocational training can be beneficial for personal-finance and career development in the future business realm. Considering the community policy, one might want to explore alternatives to classic private pension insurance that offer lower costs, such as some online insurers with low-cost ETF offerings, as suggested by the Consumer Centre, Stiftung Warentest. Instead of focusing on a single provider like Allianz, it's worth comparing the variety of insurers available to find a policy with fewer expenses and a guaranteed pension, which can maximize one's investment returns.
