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Europe Pension Gap Widens as Germany Moves to Stricter Safety Net Rules

Tighter asset rules could push retirees to deplete savings sooner.

Overview

  • New analysis using Eurostat data finds state pensions fail to cover typical over‑60s’ expenses in most European countries, with only Romania, Czechia, Poland and Spain showing a surplus.
  • In Germany the average statutory gross pension was about €19,138 in 2023 versus roughly €28,663 in annual spending for a typical single older household, with housing and energy consuming about a third of budgets and roughly 60% of over‑60s renting.
  • The Bundestag voted 320–268 on 5 March to replace Bürgergeld with a new Grundsicherung from 1 July 2026 pending Bundesrat approval, ending the one‑year grace period and introducing lower, age‑tiered asset exemptions.
  • Under the planned rules, liquid investments such as ETFs, stocks and funds are treated as available assets, whereas certified non‑withdrawable products like Riester or Rürup contracts generally remain protected.
  • Germany announced a 4.24% pension increase from 1 July 2026, yet around 1.26 million people on Grundsicherung will often see the gain offset by benefit calculations, while 2026 entrants face 84% taxable pension shares with liability hinging on total income and deductions.