Higher interest rates for pension savers: Financial experts see an upward trend in 2024

Higher interest rates for pension savers: Financial experts see an upward trend in 2024

According to a report by www.n-tv.de,

End of a years-long decline: interest rates for life insurance are likely to rise again across the board in 2024. However, consumer advocates would have wished for more.

The projected increase in life insurance rates in 2024 is expected to have a positive impact on retirement savers. Many providers, including industry leader Allianz Leben, have already announced that they will increase the current interest rate for the coming year. This increase will enable retirement savers to earn higher returns from their insurance policies.

Experts assume that the current interest rate for classic private pension insurance will rise to an average of around 2.45 percent, compared to 2.2 percent this year. This is a clear signal of the recovery in interest rates in this sector. In addition, the current interest rate for products with a reduced guarantee is expected to increase to 2.5 percent.

Although this increase is welcome, consumer advocates see “there is still room for improvement”. They point out that the current interest rates for overnight money are sometimes higher than the bonuses for life insurance. An important factor affecting the rapid adjustment of interest rates is the additional interest reserve that life insurers had to build up to secure contractual interest rate promises.

Increasing the maximum interest rate is recommended by the German Actuarial Association in order to accommodate life insurance companies when they promise guarantees. This measure is intended to ensure that companies do not overextend themselves and offer guarantees that are too high.

Overall, the expected increase in interest rates for retirement savers will be a positive development that could lead to higher returns for policyholders. However, it remains to be seen how the implementation of the recommendations and the adjustment of interest rates will affect the market and the financial sector.