As of: March 29, 2024, 8:31 a.m
By: Amy Walker
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In Germany, the current average pension is 1,500 euros. Statistics from the pension insurance show whether this is really as little as many people believe.
Berlin - It is not uncommon for people to experience a shock when they receive their state pension for the first time after decades of hard work. The reason for this is that for many people pension payments are not enough to cover their expenses. In Germany, the average pension payment is around 1,500 euros per month, with women receiving less on average than men.
Therefore, politicians repeatedly point out that one should not rely exclusively on the statutory pension, as it only represents part of the retirement provision. Only in combination with company and private pension provision does the statutory pension make a meaningful contribution to financial security in old age.
Factors for a higher pension
A look at the statistics from the German Pension Insurance (DRV) shows how today's average pension can be compared with the pensions of the past. Since 1960 (for West Germany), the statistics have shown how much money pensioners have received.
But first of all, the basics: The following factors, among others, are important for the later pension amount:
Year of birth
Number of contribution years
Income during working life
Pay points
Earlier retirement and possibly deductions as a result
Receipt of other pensions such as survivors' pensions or disability pensions
The prospect of a generous pension is quite good for those who have made contributions over many years and earned a high income. However, the pension amount does not solely depend on individual performance. Since the DRV is mainly financed by the contributions of the insured, the general economic situation and your own income compared to the income of others also play a role.
To make this clear, there is the system of pay points. Such a pension earnings point corresponds to the average income of the working population. So if someone has accumulated a total of 45 earnings points over a period of 45 years of work, they are considered an average pensioner, also known as a “corner pensioner”. The current “corner pensioner” would receive 48 percent of his previously earned gross income as a pension.
Pension levels were at their lowest in 2015
So in order to really compare how well or poorly things are going for new retirees today compared to retirees from the past, these are all factors that you have to keep in mind. In its statistics, the DRV uses the corner pensioner and compares how much pension he received and what percentage that was compared to his salary. The latter is called the pension level.
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Since 1960, pension levels in East Germany have declined fairly consistently, albeit slowly. Anyone who retired in 1957 after 45 years of insurance received an annual pension of the equivalent of 1,478 euros, which corresponds to 123 euros per month. That corresponded to a pension level of 57.3 percent, so it was a fairly stable pension. The corner pensioner, who retired in 1977, received an annual pension of 6,644 euros at a pension level of 59.5 percent.
Which pensioners received the lowest pensions in comparison? © Uwe Umstätter/IMAGO
Pensioners received the worst pension level to date in 2015, when it was 47.7 percent of the average wage. At that time, the corner pensioner received a pension of 13,955 euros per year, i.e. 1,162 euros per month. In 2023 the pension level was 48.2 percent.
Weak pension levels are also expected in the coming years
The lowest pensions are always received by those who have had to go through severe crises with high unemployment rates and a weak economy and poor wages. This was particularly likely to be the case for those born directly after the war. And due to demographic change, the cohorts who will retire in the next ten years will also be affected by weak pension levels. However, the government has decided that the pension level must not fall below 48 percent until 2039. However, contributions to pension insurance should increase.
Finally, one should of course keep in mind that it is really difficult to generalize who was better or worse off and when. In addition to the factors mentioned, the following also play a role: gender (women in West Germany have fewer pensions on average because they were able to accumulate fewer years of contributions), federal state (East Germany and West Germany are difficult to compare before 1990) and questions about personal health and circumstances .