In many people’s eyes, the statutory pension in Germany is becoming increasingly insufficient to support basic livelihood in old age. A recent study across Europe reveals that only four countries in Europe do not have a “pension gap,” meaning the national pension system can fully cover the living expenses of senior citizens.
Traditionally, the statutory pension has been viewed as the core pillar of Germany’s social security system. However, the latest data paints a grim reality: more and more retirees find their pension income inadequate to cover their daily expenses.
According to data from the statistics platform Statista, nearly 740,000 people in Germany needed to rely on “basic old-age security” in 2024, marking a historic high. Furthermore, among the population aged 65 and above, 19.6% are at risk of poverty.
The “basic old-age security” is a national assistance provided to elderly people or those permanently unable to work due to insufficient income and assets to sustain their livelihood. It covers essential living expenses, housing, heating, and health insurance costs. Individuals who have reached the statutory retirement age, are permanently and fully unable to work, are over 18 years old, and reside in Germany are eligible to apply. Unlike general social assistance, economic support from children or parents is only required if their annual income exceeds €100,000.
In standard social assistance, if an applicant needs state aid, the social welfare office usually first requires immediate family members (children to parents, parents to children) to fulfill their “family support obligation,” meaning financially capable children or parents are asked to contribute first. However, in the basic old-age security (Grundsicherung im Alter) assistance, economic support is only requested from children (or parents) if their annual gross income exceeds €100,000. If their income is lower or equal to €100,000, they are not required to contribute financially or provide economic proof, and the applicant can directly receive state aid without depending on their children.
Data from the Federal Statistical Office of Germany also confirms this trend: currently, 13.3 million Germans live below the poverty line, accounting for 16.1% of the total population. The EU defines the poverty line as income below 60% of the national median income.
According to the Federal Statistical Office of Germany, the poverty line for single individuals in Germany was €1,446 per month last year (2024: €1,380). In comparison, the average monthly statutory pension payout by the end of 2024 was around €1,143. The gender disparity remains significant: men receive an average of approximately €1,372, while women’s average pension is only €961.
The current standard amount for basic old-age security in Germany is €563 per month for individuals (excluding housing and heating costs). However, many eligible seniors do not apply for this assistance. According to the Federal Ministry of Labour and Social Affairs’ “Wealth and Poverty Report,” it is estimated that 58% to 88% of eligible seniors do not apply. The German Social Welfare Association VdK points out that the number of non-applicants is at least equivalent to the actual recipients.
Germany is not the only country facing elderly poverty issues. A new pan-European analysis shows that only four countries in Europe have retirees who can rely solely on the national pension to sustain their lives.
A study by the data research institution DataPulse revealed the actual severity of this problem. Researchers compared the average national pension with the actual living costs of the population over 60 in each country. This analysis was based on data adjusted for inflation based on 2023 price levels.
The results are striking: only four European countries have a positive ratio of pensions to living costs. These four countries are Romania, Czech Republic, Poland, and Spain. In these countries, the average national pension exceeds the usual monthly expenses of the elderly. Romania leads with a surplus of 21%, followed by Czech Republic (18%), Poland (4%), and Spain (3%).
However, in other parts of Europe, there is a significant discrepancy between income and expenditures. According to the study, 24 European countries are facing “pension deficits,” meaning pensions fall short of covering the living expenses of the elderly.
Germany is clearly a “deficit country.” According to the study, the average annual gross pension in Germany is around €19,138, while the average annual living expenses for single households over 60 amount to about €28,663, resulting in an annual shortfall of approximately €9,500. In other words, the statutory pension in Germany only covers around two-thirds of the actual living costs.
Among deficit countries, Germany ranks in the middle with a deficit rate of 33%. Countries with more severe situations include Croatia (40%), Slovenia (39%), Hungary (38%), and Norway (37%). For many retirees, this means they must rely on savings, private pensions, support from family, or engage in additional work.
The study points out that elderly household expenses in Europe are highly concentrated. In Germany, housing-related costs (including rent, utilities, gas, heating, etc.) account for 34% of total elderly household expenditures, the largest category; followed by food and non-alcoholic beverages at 11%; transportation and leisure and cultural activities each contribute 11%.
The DataPulse analysis emphasizes that in almost all European countries, about half of the elderly’s expenses are concentrated on “housing” and “food.” Fluctuations in housing costs (especially rent and energy expenses) pose the greatest threat to the actual purchasing power of pensions. Even though many countries adjust pensions regularly to cope with inflation, if housing and energy prices rise faster than the overall price index, the adjustments may not fully keep pace.
Against this backdrop, the recent statement by German Chancellor Friedrich Merz of the CDU has sparked intense discussions. In a speech to the banking association, he explicitly stated that the statutory pension will mainly play a role as “basic security” in the future and can no longer guarantee retirees’ living standards. Merz called for a significant expansion of capital accumulation-based corporate pensions and private pension systems, emphasizing the need to move away from solely relying on voluntary participation.
However, this stance immediately faced strong opposition from the SPD within the governing coalition. SPD Secretary-General Tim Klüssendorf declared that the SPD would firmly oppose any attempt to downgrade the statutory pension to purely basic security. He stressed that for over half of Germany’s population (up to three-quarters in the East), the statutory pension remains the sole source of income after retirement. SPD parliamentary group deputy leader Dagmar Schmidt also warned that such discourse could exacerbate public concerns.
Opposition parties like the Green Party, Left Party, and BSW alliance also criticized Merz’s statements, arguing that weakening the statutory pension without reliable alternative solutions would push millions of people into hardship. Left Party leader Ines Schwerdtner sharply criticized the move, calling it a “declaration of war against the millions of hard-working people in the country,” and warned that such policies could further erode trust in politics.
The DataPulse study also shows a significant disparity in the average annual pension across European countries in 2023: Luxembourg’s pension is the highest at €34,413, while Serbia’s is the lowest at only €4,239, with the EU average being €17,321 and Germany’s at €19,138 slightly above average.
Similarly, there is a vast difference in elderly living costs: Luxembourg reaches €52,168, while Bulgaria is only at €4,558, and Romania at €4,772. Major countries like Germany, France, and Italy fall in the range of €24,000 to €29,000.
The research highlights that in countries with lower pension coverage like Norway, Luxembourg, and Slovakia, the elderly poverty rates are relatively low, primarily because these countries heavily promote corporate pensions and private savings, forming a multi-pillar retirement system where the statutory pension mainly fulfills the basic security function.
This European study once again underscores the need for countries to address the challenges of aging populations and pension sustainability. Relying solely on the traditional pay-as-you-go system of the statutory pension is increasingly insufficient to independently support the quality of life for the elderly.