Overview

• Starting in July, retirees can earn up to €2,000 per month tax-free under the new Aktivrente scheme to encourage longer labour participation.
• A DIW study estimates the tax exemption will cost around €800 million annually, largely due to existing retirees taking advantage.
• The government will broaden the Mütterrente to retroactively cover mothers of children born before 1992, imposing upfront costs of about €4.5 billion per year.
• Pensions will rise by 3.74% from July and the coalition has committed to freeze the pension level until 2031, with a formal review set for 2029.
• The Bundesbank criticises the Aktivrente’s limited effect on extending work lives and urges higher early-retirement deductions alongside life-expectancy-linked retirement ages.