A government committee in Germany proposes raising the retirement age to combat old age economy

Reuters reported, citing informed sources, that Germany may raise the age of retirement pensions and launch a state-funded fund to cover the expenses of these pensions, according to what was proposed by a government committee to study the matter, as part of the government’s efforts to confront the problem of the aging population and the rise in pension expenses.

The German government committee will present its proposals in this regard to German Chancellor Friedrich Merz the day after tomorrow, Tuesday.

According to sources quoted by Reuters, the government committee proposed gradual increases every ten years in the retirement pension age, according to average life expectancy, to reach 70 years by 2092 based on its current calculations.

According to current German law, the retirement age will reach 67 years by 2030. The proposals also include canceling the option of early retirement from the age of 63 without any discounts, due to its high cost.

The proposed pension financing fund, which is similar to the fund established in Sweden for the same purpose, aims to invest financial contributions by workers and employers in financial markets, with the aim of increasing pension levels starting in 2040.

Pension fund problems

Pension funds in Germany, and other European countries, face widespread problems as a result of the rising average age of the population as health care systems advance, which means more payments to retirees.

At the same time, the number of births declined significantly, which led to a change in the traditional demographic structure, such that a larger percentage of the population became of advanced age, which is known as population aging.

The International Monetary Fund proposed a set of measures to confront the problem in Germany, including increasing investments in training immigrants, expanding women’s work, and raising the retirement age.

However, the expansion of accepting immigrants faces sharp rejection from the far-right parties in Germany, which prompted the government to move towards raising the retirement age.

Insufficient pensions

In a related context, the results of an opinion poll, reported by the German News Agency, showed that half of Germans are saving money specifically in preparation for retirement.

49% of participants in the survey, which was conducted by the INSA Institute to measure opinion indicators and commissioned by the German newspaper “Bild am Sonntag” published on Sunday, confirmed that they are saving money for retirement through means such as savings books or stocks.

On the other hand, 42% of the survey participants reported that they are not saving for retirement, while 9% declined to answer.

At the same time, many people believe that the government pension will not be sufficient to meet their needs in the future, as a survey commissioned by the German bank Deutsche Bank last year showed that 80% of participants are convinced that government allocations for retirement will not be sufficient to maintain their standard of living.

According to the results of the survey, people under the age of 30 are the least likely to take special savings measures for retirement.