Pension level: German pensioners do so poorly in an international comparison

In international comparison, Germans retire relatively late.

But how much of their salary does that leave for retirees?

An overview shows that we are not doing well compared to other countries.

Berlin – Are German pensioners worse off than their European neighbors?

Compared to the net salary that employees receive shortly before retirement, Germans have around 52.9 percent of that left over every month when they retire.

But if you look abroad, retirees get a much larger share of their net salary after retirement.

Pension levels in Europe, Canada and Japan: Germany in the bottom third

+

In Germany, retirees receive around 50 percent of their previous net salary.

© Cavan Images/Imago

In order to compare pensions between countries, the so-called pension level is used.

The pension level shows the relationship between workers' wages and pensions.

Means: How much money do pensioners get compared to the net wages of the working population.

The pension level is given as a percentage and is based on 45 years of contributions at an average salary.

At 52.9 percent, the German pension level is low compared to many other countries.

And because there will be many more pensioners in the next ten years, but the number of employees will not increase to the same extent, the level of pensions in Germany will fall.

The legislator guarantees a pension level of at least 48 percent by 2025.

By then there should be a pension reform to prevent the pension level from falling.

Pensions in Germany: why is the pension level so low here?

So why do German pensioners get so much less than pensioners in other countries?

Many factors play a role here.

This applies, for example, to the contribution rates.

In almost all countries that have a pension level of over 80 percent (Italy, Spain, Austria, the Netherlands and Denmark), the contribution rate is also much higher than in Germany.

In Italy, 33 percent of the average salary (employee and employer share) goes into the pension fund, in Spain it is 28.3 percent.

Germany is at the bottom with 18.6 percent.

In addition, there is government spending on pensions.

In Italy, 12.8 percent of the gross domestic product (GDP) is put into retirement, in Spain it is 10.4 percent.

But Germany also spends a lot of money from the state coffers on pensioners: 9.8 percent of economic output.

The question of adjusting pensions also plays a role.

In Germany, pensions are adjusted to wage increases, while in Austria they are adjusted to inflation.

This currently means a significant pension increase for Austrian seniors.

But in the previous decades there had been very little adaptation.

Finally, it also plays a role how long the average worker pays into the pension fund and how much money he has as a result.

In the Netherlands, people work an average of 42.5 years, the average Swede 42.3 years.

However, the Germans only work for 38.8 years – so in the end they saved less.

Rubric list image: © Cavan Images/Imago