The country in Europe where a pensioner has very low expenses

2024-01-05 08:59:00, Kosova & Bota CNA

The country in Europe where a pensioner has very low expenses

Illustrative photo

Pensioners in East Germany are better off financially than those in West Germany, according to a new study.

An assessment by the Prognos Institute, published on Thursday, shows that the ratio between the cost of rent and statutory pension income was particularly favorable in Gera in 2021. On the other hand, the regional purchasing power of pensions was the weakest in Germany west and south, especially in Bavaria.

The study was carried out at the request of the German Insurance Federation (GDV). The economists compared estimated regional rents and the average pension amount for Germany's 400 independent counties and cities for the years 2013-2021 and calculated local purchasing power on this basis.

"The result is clear. Pensioners live particularly well in East Germany," the authors write. "Indeed, relatively high pensions are associated with a low cost of living."

The purchasing power of pensions averages 1036 euros

For this study, the authors used figures from the Pension Insurance Research Data Center, which last fall released its 2021 county-level pension rate estimate.

As of 2021, the cost of living and pensions have increased across Germany due to high inflation. In Gera, the average monthly purchasing power of pensions was 1,437 euros in 2021, significantly higher than the national average of 1,036 euros. Among the top five, four other East German Gera municipalities follow: Chemnitz, Cottbus, Görlitz and the Spree-Neiße district.

Which municipalities are the most expensive?

"In Bavaria, it's the opposite," the study says. "The purchasing power of pensions there is significantly below average". Indeed, according to the authors, the generally higher-than-average cost of living in Bavaria is not offset by above-average pension incomes. According to Prognos' calculation, three of the five municipalities with the lowest pension purchasing power in 2021 were in Bavaria: the districts of Berchtesgadener Land and Garmisch-Partenkirchen as well as Regensburg with 862 euros per month each.

According to the study, the most unfavorable ratio between housing costs and the amount of the pension was not in a Bavarian municipality, but in the Eifel district of Bitburg-Prüm in Rhineland-Palatinate. The authors of the study estimate that the monthly purchasing power of pensions there will be 856 euros in 2021. The list of the most unfavorable municipalities for pensioners is completed by the Baden city of Freiburg im Breisgau with also 862 euros per month.

This data is not a substitute for an "in-depth case-by-case analysis". However, the authors themselves limit the importance of their study and indicate that only the benefits of statutory pension insurance were taken into account in the calculation. Other income - for example from occupational and private pension insurance or from housing or shares owned - was not taken into account. Nor is any possible relief effect taken into account for pensioners who live in their shared apartment and therefore do not pay rent.

The study thus provides "general indications on the possible needs for pension insurance, which are derived from the analysis of the purchasing power of the regions". But it is "not intended to replace an in-depth analysis of individual cases," the authors write./ DW