Germans are afraid of not having enough money now and in old age, many would like to see a state-run digital oversight system, and concern about war and natural disasters has increased significantly. These are some of the findings from the ERGO Risk Report 2022, the third in a representative series of surveys on risk literacy and personal responsibility among Germans. The survey was conducted under the scientific direction of Professor Gerd Gigerenzer, Director of the Harding Center for Risk Literacy at the University of Potsdam. The current report focuses on “money and finances”.

Germans are afraid of not having enough money now and in old age, many would like to see a state-run digital oversight system, and concern about war and natural disasters has increased significantly. These are some of the findings from the ERGO Risk Report 2022, the third in a representative series of surveys on risk literacy and personal responsibility among Germans. The survey was conducted under the scientific direction of Professor Gerd Gigerenzer, Director of the Harding Center for Risk Literacy at the University of Potsdam. The current report focuses on “money and finances”.

“The main topic of this year’s ERGO Risk Report, money and finances, is particularly important for us, as one of Germany’s biggest insurance companies”, said Theo Kokkalas, Chairman of the Board of Management of ERGO Germany, commenting on the study. “Given the volatility in the capital markets, inflation and rising costs, ERGO has particular responsibility here – for the Company, our employees, and above all for our customers.”

“One finding is a recurring theme in all the Risk Reports: risk literacy and personal responsibility among Germans are not looking good – they decreased even further in 2022”, added Professor Gerd Gigerenzer, Director of the Harding Center for Risk Literacy at the University of Potsdam. “As such, smoking continues to be underestimated as a frequent cause of death, young people are often in the dark about the amount of pension they can expect, and the number of older workers is significantly overestimated.”

Money: Germans remain loyal to cash

89 percent (2018: 93 percent, 2019: 91 percent) of Germans love to have notes and coins in their wallets, though the coronavirus pandemic may have led to a slight decline in this preference. More younger people (under 40s: 18 percent, over 40s: 9 percent) and men (14 percent, women: 9 percent) favour the abolition of cash. Overall though, the preference for cash remains considerable across all demographic groups.

Money: Shares, funds and bonds are slowly catching on in Germany

The Germans are traditionally known to be an anxious and risk-averse nation of savers. In times of zero or even negative interest rates, for a long time this led to real capital losses. The findings in the current Risk Report indicate that something is slowly changing here. When you look at the developments in cash investments in recent years, it’s clear that investments in shares, funds and bonds are gaining ground. The proportion of German citizens that possess shares, funds or bonds has risen from a quarter to a third (2018: 25 percent, 2019: 26 percent, 2022: 34 percent). When the genders are compared, this is especially true of men (43 percent, women: 25 percent). Ownership of savings books, money market deposit accounts (“Tagesgeldkonten”) and home loan and savings contracts (“Bausparverträge”), on the other hand, has fallen slightly compared to previous years. Interestingly, 18–30 year olds are the top owners of shares, bonds and funds (44 percent), as well as being the top group with their own savings books (43 percent).

Money: More than one in four have to considerably restrict themselves financially in their daily lives – especially women

29 percent of German citizens say that they have to be extremely frugal in many areas of life in order to make ends meet. More than one in three women (34 percent), but only just under one in four men (23 percent), see themselves affected here. Among older women aged 50 and over, at 41 percent, the figure is even higher. 43 percent of Germans said that although they had enough financial resources for normal everyday life, they couldn’t afford unforeseen expenses or holidays. On the other hand, 29 percent stated that they didn’t have any financial worries at all and could even afford to make spontaneous expensive purchases.

Digitalisation: One fifth of all Germans would welcome a state oversight system

Behavioural information about individuals can be collected, processed and shared – and used for various purposes – not only by companies, but also by countries. Points systems (social scoring) are one aspect of this, with the state rewarding what it considers to be “good” behaviour (granting of all kinds of privileges, etc.) and punishing unacceptable or “reprehensible” behaviour (restriction of freedoms, exclusion from social benefits, etc.). State and commercial “social credit systems” in China have attracted particular media attention in recent years. Anyone thinking that a comprehensive state oversight system would have no chance and no supporters here in Germany would be mistaken: 20 percent of German citizens would expressly welcome the introduction of a comparable state social credit system in Germany. Among 18–30 year olds, at 28 percent, the number of supporters was even higher (among the over 50s: 16 percent). Overall, men (24 percent) proved to be considerably more open to state oversight systems than women (17 percent). The idea had a comparatively high level of support among civil servants (37 percent).

Old age: Insufficient savings for it – despite great fear of poverty in old age

Although 41 percent of Germans are afraid of poverty in old age, only just under a third of them (31 percent) said they are already making adequate provision for it (2018: 29 percent, 2019: 28 percent). Almost the same number (32 percent) said that they would like to do more, but couldn’t afford to financially. Sadly, women are the front runners here, with 37 percent.

Safety: Fear of war and natural disasters is increasing

Terrorism and war continue to rank first among the greatest risks to safety for Germans (63 percent). This represents an increase of 8 percentage points compared with 2019 (55 percent) – not least because of the experience of the war in Ukraine. In 2018, this figure was even slightly higher (68 percent), also due to an increase in the number of terrorist attacks in Germany at the time. Natural disasters and storms (50 percent) also represent a large and at the same time growing risk for German citizens. Compared with previous years, this represents an increase of ten percentage points (2018 and 2019: 40 percent in each case) in the sense of threat. This may have been fuelled by the disastrous flooding in the Ahr valley in the summer of 2021. In the midfield of the everyday risks to safety perceived most strongly by Germans are fears of: traffic accidents (37 percent), becoming the victim of a violent crime (34 percent), data theft (27 percent) and home burglaries (26 percent).

Health: Smiling into old age

Slightly more than a quarter of all Germans (27 percent) believe that positive thinking can help you live longer. Just over one in five (21 percent) believe that regular medical check-ups can have the same effect, while roughly one in four (23 percent) believe that sport and exercise are the key to a long life. In contrast, some risks like poor diet, too little sleep and the consumption of alcohol and nicotine were greatly underestimated: Although half of all respondents were correct in their assessment that smokers had a shorter life expectancy than non-smokers, when it came to what they could do personally to ensure a long life, only 12 percent of Germans considered giving up smoking to be an option, and only 2 percent would give up alcohol.

Conclusion

“The results show that inflation, low interest rates and rising prices have left their mark. Many respondents didn’t have enough money for unforeseen purchases or private provision for old age. This was particularly true of women. Fortunately, significantly more people now rely on shares for wealth creation and would invest an inheritance rather than just spend it. Nevertheless, since the first Risk Report in 2018, the risk literacy and personal responsibility of Germans have not increased but, if anything, have steadily decreased. The ERGO Risk Report 2022 also highlights the huge influence of the media on public awareness. As an example: since the media dropped coronavirus as a main topic, COVID-19 has ceased to be a significant cause of fear. And the incredible scientific progress involved in the development of vaccines also goes largely unrecognised. However, a democracy needs a critical mass of competent citizens who can deal with risks in an informed manner. That’s our next task”, says Professor Gigerenzer.

The full report and all the results and infographics relating to the sections “Digitalisation”, “Old age”, “Money”, “Safety”, “Health” and “Risk literacy and personal responsibility” can be found here: www.risikoreport.de (the information is currently only available in German).