The risk of old-age poverty in Germany could “significantly” increase within the next 20 years, according to a study by the German Institute for Economic Research (DIW) and the Bertelsmann Foundation published on Thursday.
“Even if the labor market develops positively, we must expect an increase in old-age poverty in Germany over the next 20 years,” study author Johannes Geyer (DIW) told Xinhua.
Assuming a strong German labor market, the share of German pensioners at risk of poverty could still rise from 16.8 percent to 21.6 percent by 2039, according to DIW. The major risk groups would include singles and low-skilled workers.
In addition to policy measures to improve the employment situation of the risk groups, “specific reforms of the pension system are also needed to stop the increase in old-age poverty,” noted Christof Schiller, labor market expert at the Bertelsmann Foundation.
The study counted people with a monthly net income of less than 905 euros (998 U.S. dollars) as at risk of poverty.
The proportion of pensioners in Germany who would need government support to secure their living could rise from 9 percent to just under 12 percent by 2039, according to the study.
According to Bertelsmann, east German pensioners would be particularly affected by old-age poverty. The share of elderly people at risk would increase from 6.5 percent to just under 12 percent by 2039.
The new basic pension, which German Federal Labor Minister Hubertus Heil (SPD) plans to introduce in 2019, would not be “sufficiently on target,” Bertelsmann noted.
Meanwhile, according to a survey published by the Federation of German Consumer Organizations (vzbv) on Wednesday, only one in two Germans put aside a monthly allowance for old age, while every third German respondent did not save for retirement provisions on a monthly basis.
However, the study warned that the retirement of the so-called “baby boomers” would put public health insurers in Germany to a great test over the next 20 years to cope with the “ever-increasing number of pensioners”.