Is it wrong not to use Konjunktiv I (K1) in indirect speech?

Question

I increasingly see cases where Konjunktiv I is not used to mark indirect speech and the indicative present is used instead, e.g.:

Er sagte, er muss nach Haus gehen.

instead of

Er sagte, er müsse nach Haus gehen.

Since I heard examples like these from native German speakers, I’m starting to doubt what the real use of K1 is. Would it be considered wrong using the indicative present instead of the K1 in the following cases?

• Informal speech
• Formal speech
• Informal letter/email
• Formal essay such as those at university, work and so on.

Answer 1

Indirect speech is by far the main use of the Konjunktiv I in German (the distant second being recipe-like instructions) – so one could argue that if you do not use the Konjunktiv I here, do not bother learning it for active use at all. Using the Konjunktiv I for indirect speech in any situation will arguably understood by every native speaker and is certainly not wrong.

However, using the Indikativ instead is so common that the main reason to consider it wrong would be because the grammar book says so (see this question on what can be considered right and wrong in German grammar). So if you use the Indikativ for indirect speech at almost any occasion, most people won’t even notice.

Note that, in German, there is no special grammar for certain formality levels or types of communication¹. People are just less sloppy and language change arrives later in written communication, higher levels and formal occasions (as it probably is the case with every language).

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^{¹ In constrast, e.g., to French (in particular regarding the subjonctif) – at least according to what I was taught in school.}

Answer 2

In der normalen Umgangssprache wird bei indirekter Rede meist der Indikativ gebraucht. Der Konjunktiv wird in förmlicher geschriebener Sprache oder bei öffentlichen Reden gebraucht.

Answer 3

In my experience Er hat gesagt, dass er nach Hause gehen muss. is a lot more common than Er sagte, er muss nach Haus gehen. and as a native speaker, I would always use the former. More importantly, according to Lehrerfreund (as of 2006), using Indikativ in indirect speech is/was a valid option in German schools, whereas without the "dass" it is to be corrected and counted as an error. Keep in mind that rules for exams as well as grammar rules change all the time, therefore the reference might be out of date.