Suche
Mein Konto
Old power for the economy: active pensions should bring pensioners on board!
The economic situation in Germany is worrying. The CDU general secretary is calling for an “active pension” to allow pensioners to work longer and increase stagnating productivity.
Old power for the economy: active pensions should bring pensioners on board!
The German economy has shown stagnant growth for five years, which poses major challenges for both companies and employees. Loud Overton real GDP growth between 2019 and 2024 was only 0.3 percent. Productivity grew by just 0.3 percent per year over the same period, a significant decline compared to 1.2 percent per year from 1991 to 2020. This economic stagnation is raising concerns among experts about the future performance of the German economy.
In light of this situation, CDU General Secretary Carsten Linnemann is calling for older people to work longer. The “active pension” proposal provides for tax-free income of up to 2,000 euros for pensioners who work beyond the statutory retirement age. This model is intended to encourage increased labor market participation of older people who already benefit from regulations that increase their pension entitlements by 0.5 percent per month if they work after reaching retirement age.
Problematic pension situation
However, the introduction of the “active pension” is viewed critically. Critics fear a deadweight effect that primarily benefits well-paid pensioners. Moritz Schularick from the Kiel Institute for the World Economy argues that a 30 percent increase in working hours could increase GDP from 4.5 trillion to 6 trillion euros. However, despite these potential economic benefits, both labor productivity and investment rates are at historically low levels.
Government policies and incentives
The coalition partners Union and SPD plan to make work more attractive for seniors through “active pensions”. A central element of the coalition agreement is tax exemption for pensioners who have reached statutory retirement age and can earn up to 2,000 euros. According to daily news However, the exact design of the regulations remains unclear, especially with regard to existing tax regulations.
Experts warn of the challenges that could arise as the working-age population is expected to decline by 1.5 to 4.7 million people by 2035. Self-employed people could also benefit from the regulation, but this could lead to more bureaucratic effort. In addition, pensioners who receive basic security must pay attention to other requirements when it comes to their ability to earn additional income.
The decline in skilled workers due to the retirement of the baby boomer generation increases the urgency of creating incentives for people to work in retirement age. While a comprehensive analysis is needed to determine whether the higher tax allowance represents the best possible means of solving the skills shortage, the discussion about the “active pension” and its potential impact on the labor market remains crucial for the future.