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German seniors lose buying power

The Local · 13 Oct 2012, 12:07

Published: 13 Oct 2012 12:07 GMT+02:00

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The data, released by the German government at the request of the parliamentary faction of the socialist Left party and published in the daily Thüringer Allgemeine, shows the buying power of seniors in eastern Germany dropping 22 percent since 2000, and 17 percent for those in western Germany.

Left party co-chair Bernd Riexinger criticized the government over the figures, and said the “downward spiral in pensions” must be stopped. He added that in eastern Germany, more than anywhere, there is an “avalanche” of old age poverty on the horizon.

The average pension payments, after deductions, in western Germany are €1,062 (up €17 since 2000), in eastern Germany the figure is €1,047 – a drop of €23 since 2000, the paper reported. Over the same period, the consumer price index rose about 20 percent.

More seniors in Germany are continuing to work into their old age. In 2000, 280,000 pensioners had €400-a-month jobs, which are exempt from taxes and national insurance contributions.

This figure has risen to about 761,000, the daily Süddeutsche Zeitung reported last month. Of those, 120,000 were 75 and older, the newspaper said.

Critics views those statistics with alarm, arguing that the seniors are not staying in the workforce because they want to, but because they can't live off their pensions.

The issue of pension reform has recently pitted Labour Minister Ursula von der Leyen against younger members of her Christian Democratic Union (CDU) and its coalition partner, the Free Democratic Party (FDP).

Von der Leyen supports supplements to raise the current basic pension of €688 per month to €850. In a letter to her party's junior members, she said: "At stake is nothing less than the legitimacy of the pension system for the younger generation."

FDP leader Philipp Rösler told the Welt am Sonntag newspaper last month that the plan would "cost millions. We do not have the money for that in the pension fund."

Story continues below…

Young members of the FDP and CDU are promoting more private pension savings for low income earners.

The government has proposed reducing pension contributions from 19.6 to 19 percent by the end of the year, but the proposal has stalled in the Bundesrat, or upper house of parliament, where members refused to take a stand on the issue, the daily Die Welt reported Saturday.

The Local/mbw

The Local (news@thelocal.de)

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Your comments about this article

14:51 October 13, 2012 by Berlin fuer alles
Very obvious this. All you have to do is look at the amount of old age pensioners in Berlin searching for bottles in bins for the refund money and you can see clearly that the restructuring if wealth is leaving them in the scrap heap. The Euro is working for some wealthy Germans and the rest of Germany and the EU are losing out. This is a timebomb and something needs to be done now. It is no accident all this is taking place since the Euro came into circulation.
15:58 October 13, 2012 by smart2012
Berlin fur alles, I agree, and until German press will spend time talking about Greece, Germans will fall apart with the smile on their face :)

I would like to hear what Chris tea think...
19:20 October 13, 2012 by Englishted
I agree with the two above ,but don't forget the other day it was said that the €400 jobs were being done by highly qualified individuals who are doing it to avoid tax .

Not starving old people trying to keep the wolf from the door.

"Young members of the FDP and CDU are promoting more private pension savings for low income earners."

Then young members are self centered idiots with no grasp of the real world so don't forget what the future would hold if they retain power next year.
19:35 October 13, 2012 by wxman
The most evil unlegislated tax of all, INFLATION.
21:26 October 13, 2012 by Zubair Khan
Due to inflation and price hike the effect is greater than what has been described. Those with fixed income are the most effected including pensioners. Fuel price hike is almost 50% during this period and it affects all other prices. Increase in pension and salaries should match with actual inflation.
22:03 October 13, 2012 by smart2012
Silence from Chris Rea? Too easy not to comment articles against your propaganda eh... ;)
05:57 October 14, 2012 by IchBinKönig
Just wait until the increase in energy costs next year. So smart
08:48 October 14, 2012 by ChrisRea
I apologise for being busy on Saturday midday and afternoon and not taking time to read the news on The Local. I hope it will never happen again. Smart2012, you missed me? I think that is the nicest compliment I got from you. Thank you.

State pensions schemes? I never trusted them in any country I lived in. At the fast pace the world changes, how can I rely on amounts to be paid by the ones working in 20 years (the pay-as-you-go system)? Or should I trust large financial corporations managing a funded plan? Pardon me, but I cannot do that. So I treat my contributions to pension schemes as "compulsory donations", which may come back at a certain time, but not necessarily and not at a similar value.

The good thing for me is that I do not actually plan to retire. I will not be able to keep my work capacity at 100% forever, but I do not see a reason to stop working as I pretty much enjoy it. It is not the muscles that I am relying upon to bring added value. I have a modest life style, so I do not need much money, and even working much less hours will do it. Anyway, some financial security is provided by the small real estate investments I made. My real peace of mind comes from investing in my health (mostly time) and my abilities.

"articles against your propaganda" - Oh, well, you took me again for another person. It's nothing new and guess it will happen again.
09:58 October 14, 2012 by catjones
ChrisRea 'The good thing for me is that I do not actually plan to retire.'

Unfortunately, it is not you who decides retirement, it is the highly competitive marketplace. Age discrimination is the result of experience vs cost, latest technology vs last year's, flexibility vs rigidity, a long vs short future, company retirement policies. Unless you have a particular skill (which may not be so particular years from now), you'll get shunned from the workplace like everyone else.
10:06 October 14, 2012 by Englishted

I may be wrong but i think you will find he is self-employed ,but be careful Mr. Rea as pride comes before a fall particularly where heath is concerned.I hope I'm wrong on the last part as I wish you no ill .
10:24 October 14, 2012 by smart2012
Hi Chris, yes, was missing u, but no worry, am not gay :) I think though German pension system is one of the worst in Europe, and this I cannot accept from a country which u say is wealthy... Actually Germany and all other western countries are not economically wealthy and all are struggling to keep the pace of china, India, brazil etc, without seeing that as it is today they cannot win.. Germany did reforms in 2003 which made their public systems much worst, to try to keep competing (and most Germans did not protest and like usual just followed the lead... Big mistake) and this is the result. And verkel focused in the last 2 years on Greece to hide the internal problems..

And re work, as already mentioned by our friends, the issue is not working longer, the issue is if u will still be able to have a job that u like when u get 55.. I work for a huge Enterprise in Munich,and I tell u I am not confident I will.. And I won't be happy to do a 400 euros job am 100% sure.. 400 euro job concept, another example of wrong German agenda..
13:53 October 14, 2012 by elboertjie
Exactly, INFLATION tax on everyone, but the less money one has the more one feels it.

Inflation tax happens when more and more money is being created (spent) on bailing out banks, other countries or providing stimulus packages. The creation of this new money dilutes the existing pool of money and thus one needs more of it to purchase the same physical good.

Say NO to the creation of new money. Say NO to the ECB bailing out countries and purchasing their government bonds with new money they create out of thin air.
08:49 October 15, 2012 by ChrisRea
Well done, Englishted! You are right, last time I was an employee was in January 2003. Since then, I earned my living as a freelancer and, respectively, entrepreneur in different fields. So I am pretty used to have to constantly prove the added value I bring.

You are of course also right about health. But if I will ever be so sick that I would not be able to work anymore, I will probably not enjoy life anyway. So I will actually not need to work to earn a living :)
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