Statutory pension

The statutory pension insurance is the most important pillar of retirement provision in Germany – over 56 million people are insured.

How does it work?

• Pay-as-you-go system: today's contributors finance today's pensioners ("intergenerational contract")
• Contribution rate: 18.6% of gross salary (9.3% each from employer + employee)
• Contribution ceiling: €7,550/month (2025) – no contributions on income above this

What do you get?

• The amount depends on your pension points (Entgeltpunkte)
• Standard pensioner (45 years on average pay): approx. €1,836 gross/month (2025)
• Average pension (actual): approx. €1,500 (men), approx. €1,000 (women)
• Pension level: approx. 48% of average income

Retirement age:

• Standard retirement age: gradually raised to 67 (from those born in 1964)
• Retirement at 63: without deductions after 45 contribution years
• Earlier retirement: possible, but with a 0.3% deduction per month (3.6%/year)

The demographic problem:

• 1962: 6 contributors per pensioner. 2025: only about 2 contributors per pensioner
• The baby boomers are retiring – that's why the contribution rate and the retirement age are rising