Germans are retiring later, but they are also receiving a pension for longer than they did 20 years ago. According to the German Federal Pension Insurance, pensioners will receive their pension for an average of 20.5 years in 2023. In 2003, it was 16.8 years. The pension insurance company cites the higher life expectancy as the reason for this. The “RedaktionsNetzwerk Deutschland” was the first to report on the increase in the average pension period.
According to the information, the length of time men received benefits rose from 14.3 years (2003) to 18.8 years last year, and for women from 19.3 years to 22.1 years. At the same time, the average retirement age for Germans has risen over the past 20 years. While it was 62.9 years for both men and women in 2003, it will rise to 64.4 years by 2023, according to the pension insurance.
“The reason for the long-term increase in the retirement age is in particular the increase in the age limit for claiming an old-age pension and the expiration of two types of early old-age pension,” said Uwe Hildebrandt, Chairman of the Federal Representative Assembly of the German Federal Pension Insurance. In the past, some of the early old-age pensions could be claimed at the age of 60, such as the old-age pension for women or the old-age pension due to unemployment or after part-time work.
Despite the significant increase in the length of time people receive a pension, the contribution rate to pension insurance has fallen and has remained stable for many years, it said. While the contribution rate was 19.5 percent in 2003, it has been consistently 18.6 percent since 2018.
New pensioners in Germany can also look back on more and more years in which they have paid into the pension fund. “While insured persons had an average of 33.0 years of insurance when they started their old-age pension in 2003, this figure had already risen to 39.3 years by 2023,” said the CEO of the German Federal Pension Insurance, Jens Dirk Wohlfeil, to the German Press Agency in Berlin.
The increase is particularly noticeable among women. Here, the number of average years of insurance increased from 26.6 to 37.3 years between 2003 and 2023. In the old federal states, it rose from 23.2 to 35.9 years, and in the eastern states from 41.1 to 42.9 years. For men, there was a nationwide increase from 40.5 years in 2003 to 41.4 years in 2023.
Wohlfeil attributed the increase in years of insurance mainly to the increased participation of West German women in the workforce. Another reason for the increase in years of insurance is the restrictions on early retirement options that have been in place over the past 20 years. The increased recognition of child-rearing periods through the so-called mother’s pension also has an impact on female pensioners. In addition to periods of employment, years of insurance also include periods of child-rearing, receiving social benefits and caring for others.
According to a media report, the adoption of the so-called Pension Package II in the Bundestag, which is scheduled for early July, could be delayed by several months. As the “Bild” newspaper reports, citing parliamentary group circles, numerous FDP members of parliament do not want to agree to the reform if it leads to higher pension contributions. “I will not agree to any pension package that leads to higher pension contributions,” the newspaper quoted the deputy chairman of the Young Group in the FDP parliamentary group, Max Mordhorst, as saying. “The current package is a kick in the knees for all young working people.”
The second pension package is a core social policy project of the traffic light coalition. The federal cabinet approved the package at the end of May. The decision was preceded by an internal coalition dispute that was at times open, especially between the FDP and the SPD.