A contentious proposal to raise Germany's retirement age to 70 has ignited protests and risked destabilising the country's already fragile coalition government. The debate, which has exposed deep divisions between the ruling Christian Democrats (CDU) and their junior partners, the Social Democrats (SPD), centres on the long-term sustainability of Germany's generous pension system.
Economy Minister Katherina Reiche (CDU) has been the driving force behind the proposal, arguing that demographic change and increasing life expectancy make it unavoidable to extend working lives. 'We have got to work more and longer,' she told the Frankfurter Allgemeine Zeitung, citing a two-decade-old recommendation from the DIW economic thinktank that the minimum pension age should be 70 by 2025.
Chancellor Friedrich Merz, who took office in May, has largely avoided the issue, instead offering tax breaks for older workers. He reportedly told Reiche to moderate her stance, mindful of the SPD's sensitivity on the matter. However, Reiche doubled down, insisting that for many Germans, 'happiness is not about retiring as early as possible.'
The SPD reacted swiftly, with General Secretary Tim Klüssendorf declaring any rise in the pension age 'out of the question,' calling it a disguised pension cut. Instead, the SPD advocates increasing contributions by encouraging more women to work full-time through expanded childcare and flexible working arrangements.
Economists broadly support integrating more people into the workforce, including immigrants, as a means to stabilise the pension system. Some analysts propose linking the retirement age to life expectancy, as in the Netherlands. Labour Minister Bärbel Bas (SPD) has suggested tax increases and requiring freelancers, civil servants, and MPs to contribute to the pension system—proposals rejected by the CDU.
The demographic pressures are stark: in the mid-1990s, four employees supported each pensioner; by 2020, that ratio had fallen to three, and projections indicate it will drop to 2.4 by 2035. Germany already has higher-than-average labour participation among 65- to 69-year-olds (21.2%) compared to the EU average (16%), with the average pension start age at 64.7 in 2024. Denmark recently passed a law raising its retirement age to 70 by 2040, the highest in Europe.
