Pension amount in Germany in 2024, 2023: average and minimum(social) pension, calculation of pensions, pension by profession

§ Minimum, social pension in Germany

If upon reaching the retirement age or when it is impossible to work due to disability, a person's livelyhood is not sufficient, s/he is entitled to receive the Grundsicherung allowance (the main, basic benefit). If the total income of such a person per 1 month is less than 865.00euros (as of 2020)), s/he can apply for a Grundsicherung. When calculating the benefit, income that a person receives will be taken into account and withheld from the said allowance.

The amount of the Grundsicherung allowance depends on the life situation (Regelbedarfsstufen) and ranges from 389.00 to 432.00 euros. In addition to this amount, such a person receives money for housing, heating, as well as for paying for repairs and some other needs on the basis of actual expenses.

Table 1: Grundsicherung allowance in Germany per month as of 2020
(minimum provision of social welfare at retirement age)

The application for this benefit shall be submitted to the Social Security Administration (Sozialamt). Upon receipt of a decision on the pension rate, if it is less than the established minimum, the person also receives an application form for the Grundsicherung allowance.

§ Average pension in Germany in 2024, 2023

The average amount of an actually paid pension in Germany can be found from the official data of the Federal Pension Insurance system (Deutsche Rentenversicherung). The data on the average pension in Germany are published individually for the federated states of West and East Germany (the FRG and the former GDR). As of 31 December 2019, the average amount of retirement pension paid (after the social charges deduction), net pension for the month in West Germany is 1169 euros (or 1'247.79 USD) for men, and 700 euros (or 747.18 USD) for women. It is obvious that the pension of men is much higher than the pension of women in Germany. The average pension for men and women combined is 910 euros per month (or 971.33 USD). Including the federated states of the eastern part of Germany, this amount is slightly increasing. In the table below you can find the average amount of pensions paid.

Table 2: Average pensions in Germany per month in2019
(by type of pension, men and women)

The pensions of East Germany, the former GDR lands, are slightly higher than in the lands of West Germany. On average, for men the difference is 95 euros and the pension makes 1264 euros, for women the difference is 333 euros and the pension makes 1033 euros. How many pensioners are there in West and East Germany?

The average net pension for all types of pensions in Germany as of 2019 is 870.90 EUR

Average real pension and standard estimated pension

Various sources of information often provide evidence that the standard estimated pension in Germany is much higher than the data we provide in table 2 and amounts to at least 2 times more. The fact is that the standard estimated pension (Standardrente, Eckrente) is the amount that theoretically will be received by a person who earns an average salary in Germany and will pay pension contributions without interruption for 45 years. In reality, this situation is but seldom. In addition, the average standard pension, which is often reported in the media, is usually a gross pension, with which it will still be necessary to pay social contributions, and it does not take into account other types of pensions than the old-age pension. The standard estimated gross pension in West Germany is 1'538.55 euros.

The standard estimated gross pension in West Germany as of 2020 is 1'538.55 euros

The length of service for men in Germany is at the level of 40 years, and for women - even of 30 years, this is due to the fact that the Germans study a lot and start working late, and women take breaks in their work in connection with the birth of a child and caring for them. Other factors are also of importance.

In August 2018, a decision was made in Germany: to keep the standard estimated pension at 48% of the average wage in Germany until 2025, thus preventing a reduction in the level of pension in relation to the average salary/ wage.

§ How pension is calculated in Germany

The rate of pension depends primarily on how long and how much a person has paid contributions to the state pension insurance system, as well as on other factors.

To calculate the pension in Germany, the following formula is applied:

Formula key:

• EP(Entgeltpunkte) - The calculated cumulative points of the insured person. Every year, a person’s pension contributions are checked against the average contributions in Germany and accordingly, the person receives 1 point if his/her contribution is the average in Germany or less/more than one point, depending on the amount of contributions.
• ZF(Zugangsfaktor) - Age factor. When retiring upon reaching the retirement age, this person’s age factor is 1. If a person retires at an earlier or later age, the figure becomes smaller or larger, respectively.
• AR(Aktueller Rentenwert) - The cost of a retirement point. This indicator in euros is constantly changing depending on the economic situation in the country. As of 2020, this figure is 34.19 euros for the western part of Germany, and 33.23 euros for the eastern part of the country.
• RF(Rentenartfaktor) - The type of pension factor. Depending on the type of pension, this indicator changes. For example, for a pension upon reaching the retirement age or due to complete disability, it is 1, for pensions due to partial disability - 0.5, for widowhood - 0.6, etc.

According to this formula for calculating pensions, the factors affecting the monthly pension rate are as follows: the amount of pension deductions from the salary, as well as the duration of the payment of pension contributions, retirement age, the economic situation in the country, as well as the pension type.

§ Pensions by profession: miners, civil servants, police officers, etc.

Pensions of miners, mine support workers make a special type of pension in Germany, a person can receive this type of pension when s/he reaches the age of 60, if s/he has at least 25 years of mining work experience, during which s/he has paid pension contributions. To obtain this type of pension, there are also additional conditions that can be clarified in detail in the pension insurance fund.

German civil servants, police officers, judges, military personnel, church workers, and other public services employees receive a special type of pension: a pension for civil servants (German: Ruhegehalt or Pension). These groups of pensioners have significantly higher pensions in Germany compared to the average pensions throughout the country. According to statistics published in the Versorgungsbericht der Bundesregierung, the average civil servant pension is 2'320.00 euros (as of 2019), while the regular average pension and even the standard estimated pension in the country are much lower.

Footnotes:

* The EUR exchange rate in the tables is taken as of 01 march 2022 and amounts to 1.07 USD or 0.86 GBP at the European Central Bank exchange rate. The EUR, USD and GBR exchange rates in Germany