In recent years, poverty in old age in Germany has reached worrying levels. In 2010, 12.3 percent of people over 65 years of age were at risk of poverty; by 2021, this figure rose to 17.4 percent. This development reflects a worrying trend that is gaining momentum due to demographic changes and an increasing pension gap. But what exactly does poverty in old age mean, who is particularly at risk and which strategies can counteract this?
Definition and scope
Old-age poverty affects people aged 65 and over who can no longer cover their living costs through their own or statutory provisions and are dependent on additional support. In Germany, the poverty line for older people is around 868 euros per month, based on net income. This amount is significantly less than what is needed for a dignified life in old age.
Affected groups
Women in particular are severely affected by poverty in old age, due on the one hand to the gender pay gap and on the other hand to the loss of pension points due to parental leave or part-time work. Long-term unemployed people, people with minor jobs and solo self-employed people are also at risk. Half a million pensioners depend on basic security, and more than a million work in minor jobs.
Causes
The main causes of poverty in old age are low incomes during the working phase and inadequate pension provision. The three-pillar model of statutory pension insurance, company pension provision and private pension provision forms the basis, but falling pension levels and demographic change are exacerbating the problem.
Strategies and solutions
There are effective ways to counteract poverty in old age. Occupational pension plans (bAV) provide a solid foundation. With the support of employers, a financial cushion can be built up here at an early stage. In addition, despite criticism, life insurance and Riester pensions represent further components of private pension provision.
Conclusion: Action is possible
Despite the challenges, there are feasible solutions to avoid poverty in old age. A proactive attitude towards retirement planning, the use of company pension plans and the consideration of private pension measures can be decisive. At DEGURA, we help employers and employees find and implement suitable and sustainable solutions for retirement planning. Together, we can ensure that retirement is not overshadowed by financial worries.
