Is inflation eating away at the pension?
New evaluation provides the answer
Created: 01/05/2022, 12:29 PM
According to one calculation, pensions in Germany have risen faster than inflation for a long time.
© Martin Wagner / Imago
The relationship between pension payments and consumer prices has varied widely over the past 20 years.
The forecast for 2022 is positive.
Munich - Pensions have risen faster than inflation since the turn of the millennium.
According to an evaluation by the German Pension Insurance (DRV), consumer prices increased by 32.4 percent between 2000 and 2020, while the gross standard pension increased by 37.6 percent in the west and by 53.8 percent in the east.
This is reported by the
Süddeutsche Zeitung
(SZ)
(edition of January 4, 2022).
However: in the past year the development is likely to have worsened.
According to the analysis that the DRV produced in response to
SZ
's request, the two decades were very different: from 2000 to 2010, inflation was higher than the rise in pensions.
During this period, inflation was reported to have increased by 16.6 percent.
The standard pension increased from 2000 to 2010 in the west by 9.5 percent and in the east by 11.7 percent.
This was not least due to the pension reforms after the turn of the millennium and the financial crisis with the subsequent recession.
That put pressure on wages and thus also on pension adjustments.
Standard pension in Germany: this is how it is calculated
According to the DRV evaluation, it was the other way around in the past decade: from 2010 to 2020, inflation rose by 13.5 percent. The standard pension rose by 25.7 percent in the west and by 37.7 percent in the east during this period. In this phase the economy in Germany was good, the number of employees and contributors grew significantly, and wages and pensions also benefited from this.
When calculating the standard pension, it is assumed that a fictitious person earns an average of 45 years each year and pays pension contributions accordingly.
This standard pension is currently 1,538.55 euros in the old federal states and 1,506.15 euros in the new federal states before deduction of health and long-term care insurance contributions and before the payment of taxes.
According to the DRV, pensioners who have less than 45 contribution years also benefit from the calculated increases.
Forecasts on purchasing power in Germany in 2022
According to the calculations, however, the balance sheet will worsen in 2021.
Because for pensioners from the west there was a zero round last year, for pensioners from the east an increase of only 0.72 percent.
However, the inflation rate should - after the sharp rise in the past few months to up to 5.2 percent - level off at around three percent year-on-year.
This means that pensioners have clearly lost purchasing power in 2021.
According to the forecasts, things could look better again in 2022: According to preliminary calculations, the federal government is expecting a pension increase of 4.4 percent this year.
Economists, on the other hand, expect the annual inflation rate to fall back to below three percent in the new year.
(AFP / frs)
