Growing old… that’s what we associate with pensions. So when you are young, it feels like there is all the time in the world to prepare for retirement, old age and pensions. In reality, a pension is the money we plan our existence around when we are no longer able to earn money in our professions - assuming also that retirement is something we would all like and deserve. With so many different systems worldwide, how do German pensions work for freelancers and self -employed people?
Things like taking holidays or sick leave are things we as self-employed people must account for ourselves - with no HR companies or legislations on our time to bridge this gap. So too is retirement and future planning. For many of us self-employed, the route of blue chip stock brokering and the trading of bonds is often out of the question, and it can take a decade to even be able to afford advice around these murky waters - all of which is to say, every person has a right to the most basic security of income when they are no longer working.
As pensions are connected with governments and companies - this is going to of course bring paperwork, and red tape. First off, when you are an employee, this is not really an issue as it is all configured with your employer who must work with statutory pension meaning in principle, all employees in the statutory pension insurance are compulsorily insured.
A large number of the self-employed in Germany have so far not been obliged to make provisions for old age, the risk of reduced earning capacity or for their own death. Certain groups of self-employed, on the other hand, are already included in statutory pension insurance, for example self-employed craftsmen, artists and publicists. You could also benefit from comprehensive protection of the pension insurance - from any rehabilitation that may be necessary in the event of illness to family coverage.
Pension insurance is optionally available to all other self-employed persons: via the “compulsory insurance upon request” or via the “voluntary insurance”. The self-employed can best find out which form of coverage is best in individual cases in a consultation with the German Pension Insurance.
Certain groups of the self-employed are legally included in the pension insurance. These include above all craftsmen in trades requiring approval, artists, publicists, midwives and independent teachers. For them, the legislator assumes a special need for protection. All other self-employed can apply for compulsory pension insurance.
If you do not want to apply for compulsory insurance, you should consider choosing voluntary insurance. Self-employed craftsmen traditionally belong to the group of compulsory insured persons in the pension insurance. This includes all traders who are registered in the craft role and actually work independently.