Persisting joblessness remains prevalent across the U.K.
In Germany, the popular "retirement at 63" program has seen a significant increase in applications, surpassing initial expectations set by the federal government. Originally, the government anticipated only 200,000 applications per year when the program was introduced in 2014. However, the latest figures show that the number of applications in 2021 was 254,337, marking a steady rise of approximately 50,000 more each year since 2015 [1].
As a result, the total number of insured persons who have taken advantage of the "retirement at 63" now stands at 1.74 million [1]. This surge in early retirees has led to a substantial increase in pension expenditures, with the costs for the pension without deductions projected to exceed three billion euros per month at the beginning of the year [1].
The reasons for this excess early retirement can be attributed to the current pension systems' lack of actuarially fair incentives. This means that individuals receive relatively high benefits even if they retire early, without strong financial disincentives to deter earlier retirement [1]. As more workers choose to retire sooner, the total number of retirees increases, putting pressure on the pension system.
Modeling suggests that instituting actuarially fair pension adjustments—reducing benefits proportionally for early retirees—could decrease pension costs by about 40% in Germany [1]. Without such deductions, the growing number of early retirees will elevate pension burdens substantially, although specific absolute cost figures were not detailed in the available sources.
A photograph from the pension insurance, as reported by dts Nachrichtenagentur, accompanies this article.
[1] Data sourced from various reports and news articles.
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