The bitter truth about pensions in Germany: Why do pensioners keep working after 67?

According to the German Ministry of Labor, the average pension in Germany is €1,543 after a working life of 45 years of contributions. Of the one million working pensioners, just over 800,000 elderly people work in the most precarious form of employment - “mini-jobs”.

Germany is a wealthy country, the fourth largest economy in the world and the largest in Europe, but this status as an economic powerhouse has a dark underside that has surfaced thanks to the parliamentary work of the left-wing Die Linke party.

Mini-jobs have become a forced norm

There are hundreds of thousands of elderly people who cannot stop working or, once retired, are forced to return to work. This group is growing larger every year. As reported by the German Newspaper Network (RND), Chancellor Olaf Scholz's Labor Ministry announced that in 2024, another 56,105 elderly people will join the one million German citizens who continue to work after the age of 67. This is the age that is generally the benchmark age for retirement. “More and more pensioners are working in Germany,” the RND notes, reporting information that is being repeated left and right in the German media. The RND presented data on 1,123,000 Germans by accessing a question-and-answer exchange between the Die Linke parliamentary faction and the German government.

The vast majority of these seniors work in “mini-jobs,” one of the most institutionalized forms of precarious work in Germany. The remuneration for such work is around 520 euros per month. For employers, this type of worker is exempt from some social security contributions. According to reports requested by Die Linke from the Ministry of Labor and reproduced by the RND, as many as 870,000 Germans over the age of 67 work under “mini-job” contracts. This figure is roughly equal to the total number of Germans over 67 that the German government counted as working in 2015.

The pension system is broken

“More and more people are forced to work after the age of 67, which is a sad development and a symptom that the pension system is broken. For many, this is not a voluntary decision but a necessity to make ends meet,” Pellmann said in a statement released by his parliamentary group. Dietmar Bartsch, leader of the Die Linke party in the Bundestag, has been calling for an improvement in Germany's pension system for months. He would like to see a minimum amount of 1,200 euros a month for German pensioners. According to Labor Ministry figures that Bartsch requested and made public, the average pension in Germany after a working life of 45 years of contributions is 1,543 euros.

Even before the energy crisis caused by Russia's war against Ukraine drove inflation in Germany to record levels, poverty among the elderly was already a persistent problem in the country. Quite expectedly, pensioners who have returned to work or elderly people in precarious employment are threatened by poverty, defined as an income of 979 euros a month by European standards.

The pension system is under threat

Chancellor Olaf Scholz and his government do not seem to have any solutions to the problems associated with this population group at the moment. Moreover, the Chancellor has complained that he believes that many Germans are retiring prematurely, i.e. before the age of 67. There are exceptions in Germany that make it possible to retire at 65. Not so long ago, during Angela Merkel's time as Chancellor, the country even made it possible to retire at 63 if you had been paying contributions for 35 years.

On the other hand, the German government's Advisory Council of Economists, known as the “Five Wise Men,” is where the presidents' voices are heard. Monika Schnitzer, for example, who has said she would bless the introduction of 70 as the retirement age.

Such scenarios aside, it is already clear that Germany's pension system is threatened by the fertility problem that has plagued the country for decades. According to the Federal Statistical Office (Destatis), Germany, which officially has 84.4 million people, has one in five residents over the age of 66. Destatis reports that each woman has an average of 1 child and the average age of a German citizen is already around 45 years old. If the question in the future is, “Who will pay the pensions?”, already now older Germans of retirement age have to answer the question, “Why do I need to work on an unstable basis?”.