Half of East Germany's Full-Time Workers Earn Too Little for a Pension Above the Poverty Line
Published on 07/22/2026 at 12:32 | Redaktion boerse-global.de
More than half of all full-time employees in eastern Germany are earning wages too low to secure a pension above the poverty threshold, according to fresh data from Germany's Federal Ministry of Labour and Social Affairs. The figures, released in response to a parliamentary inquiry from the Left Party in April 2025, paint a stark picture of regional inequality in the country's pension system.
To receive a monthly pension above the poverty-risk line—currently set at €1,446 gross, or 60 percent of the median income—a worker must earn at least €3,771 gross per month over 45 years of contributions. Yet across the nation, roughly 39 percent of all full-time employees fall short of that €3,700 benchmark. In eastern Germany, the share jumps to 54 percent.
Saxony-Anhalt stands out as the hardest-hit state. There, more than 300,000 full-time workers earn wages that will not translate into a pension above the poverty line. The consequences are already visible: around 81,000 seniors over 65 in the state are considered at risk of poverty. Women are disproportionately affected, with 16 percent falling into this category compared to 12 percent of men. Experts point to lower wage levels, weaker collective bargaining coverage, and fractured employment histories following German reunification as key drivers.
The persistent east-west wage gap is underscored by a separate parliamentary inquiry from the far-right AfD, submitted on July 17, 2026. Median gross earnings in 2023 stood at €3,329 in the east versus €3,898 in the west—a difference of €569. The regional disparities produce jarring comparisons: skilled workers in Saxony earned an average of €2,936, barely more than unskilled workers in Baden-Württemberg, who took home €2,907. In Saxony-Anhalt, nearly 61 percent of employees earn less than €3,900 gross, the highest share of any German state.
The fallout is already evident in social welfare statistics. By the end of 2024, nearly 700,000 pensioner households were receiving housing benefits—more than double the 300,000 recorded in 2020. Pensioners now account for over half of all housing benefit recipients. Meanwhile, the number of elderly people claiming basic income support climbed to 1.26 million, a 4.1 percent increase from the previous year. Experts estimate the dark figure is high, with up to 60 percent of those entitled to benefits failing to apply. The current standard benefit for single individuals stands at €563 per month.
The government's planned pension reforms have drawn fierce criticism. A government-appointed pension commission has proposed gradually raising the retirement age starting in 2042—by half a year per decade—alongside introducing a new capital-based pillar funded by equal employer-employee contributions of 1 to 2 percent of wages. The goal is to stabilise the pension level at 48 percent of average earnings through 2050.
But the coalition's plans to scrap the penalty-free pension after 45 contribution years and the "pension at 63" scheme have sparked outrage. Left Party MP Dietmar Bartsch called the proposals "unacceptable" given the wage data, demanding political action to transform Germany into a high-wage economy. Fellow Left Party politician Eva von Angern labelled the reforms a "social step backwards."
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