The statutory pension is the single largest item in the federal budget and at the same time the benefit whose future size is least clear. Both can be quantified from official projections: what goes in, what comes out, what the federal government tops up, and how all of it develops out to 2039. Anyone taking a location decision should know these figures — not because they announce a catastrophe, but because they set a very concrete direction.
What the system delivers
The gross standard pension — 45 earnings points, the much-quoted model pensioner with an unbroken working life at average earnings — stands at EUR 1,836 a month in 2025 and rises to EUR 1,904 in 2026.
That is the model figure. Actual payments are markedly lower. At 31 December 2024 the average monthly pension payment on old-age pensions was EUR 1,405 for men and EUR 955 for women.
In international comparison the OECD puts Germany’s future net replacement rate at 53.3 percent — for average earners entering work in 2024 with a full career. The OECD mean is 63.2 percent. For low earners the gap is wider: 57.7 percent against 75.4 percent across the OECD. Precisely where the system would need to cushion hardest, it falls furthest behind.
The pre-tax pension level (Sicherungsniveau vor Steuern) is fixed at 48.0 percent by the statutory floor now extended to 2031, and falls after that to 46.3 percent by 2039.
What it costs
The contribution rate stays flat at first and then rises in steps:
| Year | Contribution rate (central variant) |
|---|---|
| 2025–2027 | 18.6% |
| 2028 | 19.8% |
| 2030 | 20.1% |
| 2035 | 21.0% |
| 2039 | 21.2% |
The step from 2027 to 2028 is the most conspicuous: 1.2 percentage points in a single year, split equally between employer and employee. It falls in the same year as the contribution surcharge in statutory health insurance.
The second funding pillar is the federal budget. For 2026, EUR 97.55 billion in federal subsidies to the general pension insurance is budgeted — EUR 63.94 billion general and EUR 33.61 billion additional subsidy. Adding up every federal payment to the statutory pension insurance gives EUR 116.1 billion for 2024; for 2026, EUR 128 billion is earmarked.
The order of magnitude is visible in the budget itself. Section 11 (Einzelplan 11, labour and social affairs) is the largest federal budget at EUR 197.4 billion and accounts for 38 percent of the entire 2026 budget; EUR 127.8 billion of that is what this section itself allocates to the pension insurance — the EUR 128 billion above is the same benefit counted across all chapters, stated as a rounded total. Chapter 1102 alone grows from EUR 134.42 billion (2025) to EUR 140.01 billion (2026) — an increase of EUR 5.59 billion in a single year.
And the curve keeps pointing upwards: the general and additional federal subsidies together come to roughly EUR 93.2 billion in 2025 and rise to around EUR 156.6 billion by 2039. Their share of the pension insurance’s total revenue stays constant at 22.2 to 22.8 percent — so the system remains permanently tax-funded to the tune of a good fifth.
What actually arrives
The figure that closes this calculation is the number of people for whom it does not add up. In December 2025, 764,065 people above the SGB XII age threshold drew basic income support in old age — 3.4 percent more than a year earlier and a new record high. Together with recipients on grounds of reduced earning capacity the total is 1,283,860; notably, the entire increase falls on the old-age group, while the number of people with reduced earning capacity fell by 0.5 percent.
The federal government reimburses the Länder in full for the net expenditure involved. The budget line grows accordingly: EUR 11.06 billion (actual 2024), EUR 11.75 billion (2025), EUR 12.45 billion (2026).
The at-risk-of-poverty rate among people aged 65 and over stands at 19.5 percent, above the 16.1 percent recorded for the population as a whole. For women aged 65 and over it is 21.3 percent, for men 17.3 percent. Germany therefore carries a measurable old-age poverty premium — statistically, old age is riskier than the average of the life that came before it.
What sits on the other side
For location-independent self-employed people the decisive quantity is not the pension level but the difference between what you pay in and what you may expect out of it. A contribution rate rising to 19.8 percent from 2028 and to 21.2 percent by 2039, against a pension level falling from 48.0 to 46.3 percent over the same period, describes a direction: paying more for less entitlement.
In Georgia there are no compulsory contributions of this kind for the case considered here. Provision is organised and budgeted privately — which is not an advantage in itself but a shift of responsibility. The difference lies in the means for it existing at all: at 1 percent on turnover under the Small Business Status up to 500,000 GEL, a given turnover leaves a multiple of what remains after the German tax wedge of 49.3 percent.
Anyone weighing this route should clarify in advance how German entitlements already acquired and existing pension contracts are treated — that is an individual matter and belongs in advice, not in a blog post.
What follows from it
The system is not on the brink of collapse, but it is on a path that gets worse for younger people: a replacement rate ten points below the OECD mean, a contribution rate rising from 2028, a pension level falling from 2031, federal subsidies on their way to EUR 156.6 billion, and a new record high in basic income support in old age. That is not a forecast but the federal government’s own projection.
How the cost and the return of the location compare overall is set out in Government ratio 50.3%. Anyone planning the timing of a departure should read Emigration: 8.2 million Germans — exit taxation under § 6 AStG gets more expensive with every year of growth. Asset holders will find the second half of the calculation in German wealth levy: EUR 2.8 trillion, and anyone with parents facing care in Parental support: the EUR 100,000 threshold.
Austria solves the same task with markedly higher benefits and correspondingly higher costs — the comparison is in Austria’s pension gap.
Frequently asked questions
FAQ
What is the pension level in Germany?
The pre-tax pension level is fixed at 48.0 percent by the statutory floor extended to 2031 and falls after that to 46.3 percent by 2039 in the central variant. In international comparison the OECD puts Germany’s future net replacement rate at 53.3 percent for average earners, against 63.2 percent across the OECD. For low earners the figures are 57.7 against 75.4 percent.
How high will German pension contributions go?
The contribution rate to the general pension insurance stays at 18.6 percent until 2027. After that it rises, in the central variant of the Pension Insurance Report 2025, to 19.8 percent (2028), 20.1 percent (2030), 21.0 percent (2035) and 21.2 percent (2039). The step from 2027 to 2028 is 1.2 percentage points in a single year. The statutory ceiling of 22 percent up to 2030 is respected in all nine model variants.
How much tax money goes into the pension system?
The 2026 federal budget earmarks EUR 97.55 billion in federal subsidies to the general pension insurance — EUR 63.94 billion general and EUR 33.61 billion additional subsidy. Counting every federal payment together, the figure was around EUR 116.1 billion in 2024, and EUR 128 billion is planned for 2026. By 2039 the general and additional subsidies rise to roughly EUR 156.6 billion; their share of pension insurance revenue stays constant at 22.2 to 22.8 percent.
How much pension do people actually get?
The gross standard pension for 45 earnings points is EUR 1,836 a month in 2025 and EUR 1,904 in 2026 — but that is a model figure for an unbroken working life at average earnings. Actual payments at 31 December 2024 averaged EUR 1,405 for men and EUR 955 for women on old-age pensions.
How many pensioners depend on basic income support?
In December 2025, 764,065 people above the SGB XII age threshold drew basic income support in old age — 3.4 percent more than a year earlier and a new record high. Together with recipients on grounds of reduced earning capacity the total was 1,283,860. The at-risk-of-poverty rate among people aged 65 and over is 19.5 percent against 16.1 percent for the population as a whole, and 21.3 percent for women aged 65 and over.
Is the German statutory pension about to collapse?
Not in the short term. For the end of 2025 the sustainability reserve is estimated at roughly EUR 41.5 billion, equal to 1.39 months of expenditure, and the statutory contribution ceiling of 22 percent up to 2030 is respected in all nine model variants of the Pension Insurance Report 2025. The strain shifts into the 2030s: a rising contribution rate from 2028, a falling pension level from 2031, and federal subsidies on their way to EUR 156.6 billion by 2039.
This article is general information and does not constitute legal or tax advice. The figures come from the Pension Insurance Report 2025 (Rentenversicherungsbericht) of the Federal Ministry of Labour and Social Affairs (pension level, contribution rates, federal subsidies, gross standard pension, pension payment amounts, sustainability reserve), the Federal Budget 2026, Section 11 (federal subsidies, Chapter 1102, reimbursement of basic income support), the Federal Court of Audit (Bundesrechnungshof, information on the development of Section 11), the OECD (Pensions at a Glance 2025, net replacement rates and Country Note Germany) and the Federal Statistical Office (Destatis) (basic income support in old age, press release No. 104 of 26 March 2026; poverty risk among older people, EU-SILC in the microcensus). As of August 2026, subject to changes in the data.