Do pensioners have to fear for their salaries? The state urgently needs money. Pensioners cost him 127 billion euros annually – no other individual item is as expensive. But will the traffic light coalition really make savings for retirees?
Germany’s financial situation can make pensioners sweat in fear:
So do pensioners also have to worry about their other salaries? Rather no. Six facts explain whose pension the federal government could actually cut, why it probably won’t do it anyway and why the vast majority of pensions are secure at their current level.
Anyone who pays contributions to pension insurance for long enough also acquires a right to payment. In principle, the state cannot affect this claim. No party is demanding that. Likewise, the amount of a current pension cannot be reduced. There is a pension guarantee for this.
For good reason: There are hardly any measures more unpopular than a pension cut. Almost every German will receive a pension in their lifetime. Cuts upset everyone.
The amount of pension that retirees currently receive or that employees read on their pension notices is therefore certain.
In order not to allow pension contributions to rise too sharply in the aging German society, some politicians and experts are calling for salaries to be increased more slowly in the future than before. But there is currently a lack of a political majority for this too.
In any case, these proposals are not aimed at a cut, just a slower increase. So pensioners wouldn’t get less, just more more slowly.
The federal government has influence on the pension at 63. It finances this through subsidies. The federal subsidies generally do not flow into the pension fund, but rather pay for the majority of benefits for which pensioners have not paid contributions. This includes retirement at 63.
If the state abolishes them completely, it will cut the salaries of future pensioners through the back door. Anyone who retires earlier than the retirement age of 67 after 45 years of contributions would then be treated like a normal early retiree: they will receive benefits based on the contributions they have paid, but no supplements from the household. That means he has to accept discounts like everyone else. These are currently 0.3 percent for each month that you retire early.
Only politicians from the CDU and FDP are currently calling for an end to pensions at 63. The SPD and the Greens are against it. So there is no sign of a majority against retirement at 63 in the traffic lights.
The federal government also finances other pension increases through grants. It increases the assessment of retirement periods in the new federal states as well as periods of vocational training. It pays pensions for periods of technical school training and maternity leave.
These subsidies are made through the tax system because they are intended to serve the public. The country needs mothers and well-educated workers. The pension level should not deter anyone from pursuing this path in life. So the federal government intervenes.
He could cut back here too. So far, no politician has called for this. Since the social damage could exceed the savings, little will change.
Future retirees will therefore probably receive lower pensions through slower increases rather than through cuts. However, this step is primarily intended to limit pension contributions. It only relieves the federal government to a limited extent, through subsidies that grow more slowly. It will not plug the 2025 budget gap. Pensioners will not receive less money, just more at a slower rate.
Pensions are currently rising in step with wages. Retirees should benefit from the growing productivity that they laid the foundation for. Some politicians and experts, including the head of economics, Monika Schnitzer, want to link pensions to inflation. If everything goes as it did in the past, salaries will rise more slowly. But they retained their purchasing power.
If the federal government sticks to all pension subsidies for the time being, it will have to cut other areas or raise more money. Not easy, because the pension subsidies cost Germany more money than twelve other ministries combined receive.
But Lindner and the ministers are under pressure to make savings. The finance minister has already presented the ministries with budget targets for 2025 that are intended to save 25 billion euros. Several ministers are already resisting and want more money. However, around 19 to 20 billion euros in savings were passed without any objections.
There is currently a gap of around 16 billion euros. Linder doesn’t want to close it through tax increases. Basically possible taxes such as a financial transaction tax, which are primarily intended to curb high-frequency trading by banks, are in the EU queue and probably don’t bring in enough money anyway. Further austerity measures are likely to anger ministers.
In the long term, the federal government is currently facing further rounds of austerity. The Bundeswehr’s 100 billion euro special fund will be used up in a few years. The state will then have to finance the money from the current budget. This will cost tens of billions of euros.
The traffic light could fill the current budget gap and the future ones with loans. If it reforms the debt brake, for example by allowing loans for investments, it could probably finance parts of the budgets for digital and transport as well as education and research through debt and thus create space in the budget for other measures.
If it does not do so, the question of higher taxes, lower pensions or new debts will arise again in a few years.