Statistics from the European Union’s statistical office Eurostat have revealed that people over the age of 65 and living in Germany are increasingly at risk of falling into poverty.
According to figures from Eurostat, 3,245 million people over the age of 65 and living in Germany were at risk of falling into poverty in 2023, an increase on the 3,157 million who were at risk in 2022.
The figures have been seen and reported by the Deutsche Presse Agentur after they were requested by the populist Bündnis Sahra Wagenknecht (BSW) party.
While the year-on-year difference is small, a decade comparison reveals a sharp increase, up from the 2,4 million old people who were at risk of falling into poverty in 2013.
Old people in Germany are considered to be at risk of falling into poverty if they receive less than 60 percent of the national average wage each month. 60 percent of the national average wage works out at around 1.310 euros per month for single people and 2.751 for a couple with two children.
The German statutory pension system’s Rentenniveau currently sits at 48,2 percent, this is the percentage of the average German wage that a pensioner who has paid into their pension fund for 45 years receives when they retire.
The German pension system combines a pay-as-you-go system, in which the working population pays for pensioners’ benefits, with supplementary pension plans. With the Rentenniveau at 48,2 percent, pensioners must pay into supplementary “top-up” plans to live securely and comfortably,
As Germany grapples with demographic change - the number of pensioners is expected to increase by 22 percent by 2035 - politicians are floating different suggestions about how the statutory pension system should be reformed to manage imminent pressure.
In March, Olaf Scholz’s now-defunct coalition government announced that it would introduce the Rentenpaket II. This new statutory pension system will allow the government to buy stocks across an international capital market, with the hope of reducing the Rentenniveau to 48 percent and freezing it for the foreseeable future.
These stocks will be a new source of funding for the statutory pension system, with the long-term goal of easing the cost of pension contributions for individuals and taking pressure off the government budget. According to the plan, the government hopes to build up at least 200 billion euros of stocks by the mid-2030s.
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