Recommendation of economists
Baby boomers should pay significantly higher additional contributions
Updated 11/11/2026 – 8:02 p.mReading time: 3 minutes
Nursing care insurance is facing a massive increase in premiums. Economists are now proposing a capital market solution – but this could be expensive, especially for older people.
The pension shows the waynow nursing care insurance should follow: In order to mitigate rising contributions and higher personal contributions in old age, the Advisory Council for the Assessment of Overall Economic Development advocates moving away from the purely pay-as-you-go system in its annual report for 2026/27. Instead, nursing care insurance should focus more on capital coverage.
To do this, the insured should pay additional contributions, which are then invested on the capital markets. The profits from these investments should then be used to reduce personal contributions in old age without having to reduce nursing care insurance benefits.
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Contributions for nursing care insurance are rising rapidly
With their proposal, the economists are reacting to the increasing expenditure on long-term care insurance. These will increase sharply in the near future due to the aging of society and lead to exploding contribution rates for those insured. A simulation by the so-called economists showed that the average contribution rate could increase from the current 3.7 percent to 4.7 percent by 2030. A further increase to 5.2 percent is expected by 2040, and by 2080 the contribution rate could ultimately be an average of 7.3 percent – this would not only be a heavy burden for the contributors, but for the entire economy.
Due to the long investment horizon, the nursing capital has a high risk-bearing capacity. Short-term setbacks on the stock markets have less impact, so the money can be invested with comparatively little risk but with high returns. The economists advocate internationally broadly diversified investments with a high share of stocks.
That’s how high the additional contributions would be
However, under this system, the older generations would have to pay significantly higher additional contributions than the younger ones. This generation is currently retiring or is about to retire: there are only a few years left until the age at which the need for care typically arises. Since high stock profits or interest income can hardly be achieved in a short period of time, the capital stock would have to be built up in a short period of time through very high ongoing savings contributions. Economists expect additional contributions of between three and six percent of income subject to contributions for insured persons born between 1953 and the mid-1960s.
For younger generations, who have significantly more time to build up a capital stock, the additional contribution is significantly reduced. The economists expect additional contributions of less than one percent for everyone born after 1980.
Sustainability factor in care
As with pensions, the distribution of the financial burden between those in need of care and those paying contributions could be controlled via a sustainability factor. This stipulates that if the number of people in need of care increases, the care services (e.g. care allowance) will increase more slowly than the actual costs. As a result, contributions would rise more slowly, but at the same time the benefits of statutory nursing care insurance would also decrease.
