Germany’s pension contribution rate is expected to rise to 19.7% in 2028

Germany’s public pension system is facing rising costs as the population ages.

Fewer people paying contributions will have to support more retirees, while pension payments are expected to rise by 4.1% next year.

The system is forecast to run a deficit of nearly €11 billion this year, drawing down reserves that are nearing their legal minimum.

The contribution rate is expected to rise to 19.7% in 2028, from 18.6%, its first increase in more than two decades.

It is then projected to climb gradually to 21% by 2038; the government has kept the pension level fixed through 2031, making higher contributions or more tax funding ways to cover costs.

A government pension reform is still being debated, and its proposals are not included in the rate forecasts; some could reduce spending, while a proposed funded component could add two percentage points to contributions.