The current evaluation, which shows that almost one in four pensioners in Germany lives on less than 1,500 euros a month, highlights the challenges of pension security and the economic situation of many older people.
Background: Income Distribution among Pensioners
- Income Threshold: Nearly 25 percent of pensioner households have a monthly net income of less than 1,500 euros.
- Comparison to the Middle Class: The Institute of the German Economy (IW) defines the middle class for singles with a lower limit of about 1,850 euros net per month. Many pensioners, therefore, fall significantly below this threshold.
- Standard of Living: With an income below this threshold, it is difficult to maintain the standard of living from working life or to manage unforeseen expenses.
Impacts on Pension Policy
- Pension Level and Safety Line: The statutory pension remains a central pillar of pension security for many. Since 2019, a safety line has been in place: The pension level must not fall below 48 percent – at least until 2025.
- Taxable Pension: Due to regular adjustments and rising living costs, more and more pensioners are becoming tax liable, which can further burden their net income.
- Equitability of Contributions: The contribution assessment ceiling ensures that high incomes are subject to pension insurance contributions only up to a certain limit (2025: 96,600 euros annually). Those above this threshold do not pay contributions on income exceeding it – which exacerbates inequalities.
Economic Situation for Savers and Investors
- Private Provision Necessary: Given low statutory pensions, private pension provision is becoming increasingly important.
- Investment Behavior Influenced: Savers and investors need to engage more with sustainable investment strategies to ensure financial security in old age.
- Risk Aversion vs. Return Opportunities: Many older people prefer low-risk investments such as fixed deposits or government bonds – but these currently often offer low interest rates.
Conclusion
The fact that almost one in four pensioners in Germany has to get by on less than 1,500 euros a month reveals structural weaknesses in the German welfare state. It makes clear:
The statutory pension alone is not sufficient for many to secure a middle standard of living in old age.
This has direct consequences for politics (e.g., discussions about the basic pension or higher minimum pensions), but also for the behavior of savers and investors: Private provision is becoming indispensable – as is a reform of the existing system towards greater fairness in contributions and benefits.