Germany Plans to Raise Retirement Age and Scrap Early Pensions

The German government is considering major changes to the state pension system. A new report from the Pensions Commission suggests raising the retirement age and removing early pension options for long-serving workers. At present, everyone born after 1964 can retire at 67, no matter how long they have worked. The commission wants to end the rule that allows people to retire early without penalty after 45 years of contributions. Chancellor Friedrich Merz has argued that those who start work later in life contribute less than those who begin at 16 and work for decades.

Under the proposals, the retirement age would gradually increase in line with life expectancy. By 2041, workers would retire at 67.5, and by 2051 at 68. The government plans to adopt these recommendations, meaning most people will have to work longer. Those without university degrees would be particularly affected, as they tend to start work earlier and often have more physically demanding jobs.

The commission also acknowledges that some workers may struggle to continue in physically taxing roles until the new retirement age. In such cases, an individual health assessment could allow for early retirement. Academics, who generally earn more and live longer, would benefit from higher pensions over a greater number of years. The proposed changes would mean a higher retirement age for future workers. Early retirement after 45 years of contributions would no longer be penalty-free. Physical job demands and health assessments would determine exceptions to the new rules.