The German pension system: Three unpleasant alternatives threaten the pension. New study shows which one is most likely to be accepted.

The German pension system: Three unpleasant alternatives threaten the pension. New study shows which one is most likely to be accepted.

According to a report by amp2.handelsblatt.com, a study by the German Economic Institute (IW) shows that the German pension system is facing major challenges. The financing of statutory pension insurance is not sustainable because the ratio of people of working age to people over 67 is increasingly unbalanced. According to the study, there are three unpleasant alternatives to save the system: higher pension contributions, later retirement or a falling pension level.

The study showed that citizens would be most likely to accept higher pension contributions, while a falling pension level would be least accepted. The study also showed that people under the age of 50 are the most concerned about their retirement savings and at the same time the least opposed to pension reforms.

The possible effects of this situation on the financial market are diverse. An increase in pension contributions could result in employees and employers having to bear higher non-wage labor costs, which could affect the competitiveness of companies. However, later retirement could lead to longer working hours and higher productivity for older workers. If pension levels fall, older people may become more dependent on state support.

Overall, it is clear that the German pension system urgently needs reforms in order to remain financially sustainable in the long term. Politicians are faced with the challenge of choosing from the unpleasant alternatives the one that has the least negative impact on the labor market and the financial sector.