Overview

• German pensions will rise by 3.74 percent from July 2025 under plans approved by the government.
• Lawmakers are debating proposals to gradually raise the statutory retirement age toward 70 and to tighten eligibility for the 'Rente mit 63' early-retirement scheme.
• Almost 270,000 people retired early without penalties under the long-service scheme in 2024 as the minimum age for penalty-free departure rises in stages for younger birth cohorts.
• Without new reforms, pension contribution rates are projected to jump from 18.6 percent today to 21.4 percent by 2038 because of demographic shifts and a shrinking workforce.
• Economists warn that the cost of sustaining current benefits may unfairly burden younger generations, prompting the introduction of an 'Aktivrente' scheme that lets retirees earn up to €2,000 tax-free per month if they continue working.