Monday, 26.06.17, written by Juliane Wellisch
A new study on retirement warns of an alarming development. Thus, by 2036, around 25 percent more people will be affected by old-age poverty than at present. Especially single women are threatened by financial worries. Especially her pension will not be enough in old age. At the same time, the minus in the statutory pension fund is growing.
Carefree in old age: Soon no more self-evident
More than one in five 67-year-olds will be threatened with old-age poverty in 2036. This worrying finding comes from a recent study by the German Institute for Economic Research (DIW) and the Center for Economic Research (ZEW) commissioned by the Bertelsmann Foundation. Accordingly, the number of those affected is rising from the current 16.2 percent to 20.2 percent .
Particularly dramatic is the increase in single women . Instead of 16.3 percent, 27.8 percent of them will be at risk of poverty , ie less than 60 percent of the average income will be available. They are particularly likely to meet the two biggest risk factors for old-age poverty: career breaks and precarious employment at low wages. In addition, demographic change is causing a decline in pension benefits.
In addition to single women, working people from eastern Germany are also threatened by poverty in old age, as they were affected by the upheavals in the labor market in the years after reunification. According to the study, the poverty rate for them will rise from 5 percent to 11.2 percent by 2036. In addition, the situation is worsening for long-term unemployed people who have been jobless for five years or more. Already today, 18.7 percent of new arrivals are at risk of poverty, and by 2036 the figure has risen to 21.9 percent .
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With the higher poverty rate among young people until 2036, the number of elderly people who are dependent on old age will increase. Currently, the rate is 5.4 percent for the 67-year-olds. According to the authors of the study, the value will rise to seven percent by 2036, based on the current development.
At least for the first time, allowances for benefits from occupational pensions and Riester pensions were introduced for the basic pension in old age as part of the occupational pensions strengthening law. Up to 202 euros per month are thus exempted from crediting the social benefits . For low-income earners, it pays off despite the threat of old age poverty, with a company or private pension plans to put aside some money for the retirement. However, the study authors fear that low-income earners often do not have enough money during their working life to spend on old-age provision.
On the other hand, middle-income people and families benefit from the provision . Depending on the type of pension plan chosen, they are supported by the government through supplements or tax benefits, and some employers also help their employees to set up a pension scheme.
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The study could boost the SPD in the upcoming election campaign. For while the CDU does not want to change the current pension policy, a few days ago the Social Democrats presented a – albeit controversial – pension concept.
Union and SPD have together implemented comprehensive pension reforms over the last four years. Above all, the mother’s pension and the pension at 63 are considered very expensive undertakings . As a result of this and the demographic change since 2015, the pension fund has paid more than revenue. Thus, the minus in 2016 was around 2.2 billion euros. The reserves of the pension fund are shrinking. In the long term, this will lead to rising pension contributions. But pension benefits could also continue to fall – which in turn could lead to more pensioners in financial difficulties .
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