The German pension system is often cited as an example by those in favor of the French government’s pension reform. Example of a country where the legal retirement age is 65 and will be gradually raised to 67 by the end of the decade. But Germany is far from being a model to follow in the eyes of Manuel Bompard, deputy La France insoumise of the Bouches-du-Rhône.
“In Germany, the retirement age is higher than in France, but the rate of poor retirees is twice as high as in France. This is not necessarily a model that we want to decline here”, he said during 8:30 a.m. on franceinfo on Tuesday March 21. And his numbers are good.
19.4% of German pensioners below the poverty line
Eurostat, the European Commission’s directorate-general responsible for statistical information, publishes the “at-risk-of-poverty rate of pensioners in Europe”, commonly shortened to “poverty rate of pensioners”. It shows the proportion of retirees who live below the poverty line, that is to say that they receive less than 60% of the median income in their country each year, after the payment of their possible aid.
According to the latest figures, which date from 2021, 19.4% of Germans aged 65 and over live below the poverty line, i.e. 3.3 million people, compared to 10.9% of French people in the same age group. , or 1.5 million people. There are therefore about twice as many poor pensioners across the Rhine. Even if these figures do not take into account all the retirees of the two countries. In France, the legal retirement age is currently 62 – the pension reform wants to push it back to 64 – and some can retire even earlier. In Germany, it is possible to leave from the age of 63 provided that you have paid contributions to the pension fund for 35 years.
Note that it is more relevant to compare percentages than euros – the poverty thresholds are set at 1,160 euros per month in Germany and 1,000 euros in France according to Eurostat (2021) – because the euros do not take into account the different costs of living on each side of the Rhine.
Low pensions and mini-jobs
There are several reasons for the poverty rate of German pensioners, starting with the level of pensions. A German pensioner receives only half the salary he had before (52.9%), while a French pensioner receives three-quarters (74.4%), according to the Organization for Economic Cooperation and Development (OECD, 2021).
It is also due to the fact that German pensions are not indexed to inflation and to the development of mini-jobs over the last 20 years in Germany, part-time jobs with low wages and very few social security contributions. In addition, Germany only created a minimum old age in 2021, but, as in France, it is set below the poverty line.
As a result, many German retirees are working. 17.2% of Germans aged between 65 and 69 were working in 2021, compared to 8.6% of French people of the same age (Eurostat 2021). The same year, 7.7% of Germans who were between 70 and 74 years old worked compared to 2.6% of French people of the same age. And still 1.9% of Germans over 75 continued to work against 0.5% of French people.
16.8% of poor pensioners in the European Union
In the European Union, the poverty rate for pensioners is 16.8% on average. France is therefore well below, unlike Germany. France is the fourth best off country in Europe, after Luxembourg (9.1%), Slovakia (10.3%) and the Czech Republic (10.5%).
On the other hand, the situation is quite critical in the Baltic countries. 35.9% of pensioners are at risk of poverty in Lithuania, 40.6% in Estonia and 44.6% in Latvia. The rate is also above 30% in Bulgaria and Croatia.