Pensions in Germany, France and Italy: These figures are inconsistent

Pensions in Germany, France and Italy are compared in social networks: according to this, Germans with a late retirement age (67 years) and a low “homeowner rate” (51 percent) would have the lowest percentage pension rate in a comparison of the three countries (48.1 percent of last net salary). The graphs with the numbers have been updated several times since May Instagram, Facebook and Telegram divided.

However, the numbers are outdated: a newspaper clipping with it dispersion was already on the internet in 2020 and was checked by us in a fact check. Our research showed that the information was not up-to-date back then – some of it dates from 2017. The graphics also compare values ​​from very different statistics, which are not comparable.

The table has been shown in different versions on social networks no later than 2020 (sources: Instagram / Telegram; screenshots: CORRECTIV.Faktencheck)

The figures for “pension from last net” in Italy and France are from 2017

The data on the pension rate to the “last net” in Italy and France can be found in a country report from the Organization for Economic Development and Cooperation (OECD) from 2017 (PDF, fetch). The net compensation mentioned therein describes the relationship between the national pension and what has been earned before retirement – net, ie. after taxes.

The 2017 OECD report indicates a net replacement rate of 93.2 percent for average incomes in Italy and 74.5 percent for France.

Germany’s net replacement rate was 50.5 percent in 2017, not 48.1 percent, as shown in the charts.

Table 2017 Pension overview International
According to the OECD, this is how high the net compensation rates by level of earnings were in Germany, Italy and France in 2017 – this is a theoretical model calculation. The number marked in red for Germany does not match the claim in social networks. (Source: OECD Pension Models, page 121 / Screenshot and highlights: CORRECTIV.Fact Check)

These figures are outdated. There is already one OECD Report for 2021: According to this, the net compensation rate was 81.7 percent in Italy, 74.4 percent in France and 52.9 percent in Germany (page 145 of the report). So it rose slightly in Germany and fell relatively sharply in Italy.

Table 2021 Pension overview International
In 2021, net claims rates after earnings have fallen in Italy and France compared to 2017 (red), while they have risen in Germany (green) (Source: OECD Pension Models, page 145 / Screenshot and markers: CORRECTIV.Fact Check)

As we did in 2019 for another fact check examined, the net replacement rate is a theoretical model calculation. It refers to the assumed pension for a 20-year-old entering the labor market in 2016 (in the case of the 2017 OECD report).

The pension level in Germany is calculated differently – it was last at 49.4 percent

So where does the 48.1 percent figure shown in the charts come from? This is the so-called pension level in Germany from 2018. The percentage has been found in a report on Website for the German pension insurance. It is also outdated: in 2021, the pension level rose to 49.4 percent (PDFpage 11).

A direct comparison with the OECD figures is also misleading because the pension level is calculated very differently. To pension level refers to how pensions in Germany develop relative to average income. An example: If the average pension increases faster than the average earnings, the pension level increases.

The fact that Germans receive less “pension from the last net” than the French or Italians does not necessarily mean that German pensioners are poorer or have a lower standard of living: the calculation of the “net pension” alone says nothing about the actual pension in old age. This is the average pension in Italy in early 2022 according to the Italian social security INPS to 1,285.44 euros per month (page 17). In Germany it has been EUR 1,369 (West) and EUR 1,340 (East) since July 2021 (in each case under “Standard net pension before tax”). This information may be as a PDF at this link Fetch.

In such a comparison, the various high cost of living in the countries should actually be taken into account. The figures are only intended to clarify: the difference is not as large as it is suggested in the social networks.

The standard retirement age in Germany is 67 – just like in Italy

The contributions bring the average retirement age for France to 62 years, for Italy 60 years and for Germany 67 years. The figure for Germany is correct: For persons born in 1964 or later, the standard retirement age is at 67 years.

In France pension is possible from the age of 62, so this figure is also correct, but certain conditions must be met. In Italy early retirement begins at the age of 62 – the normal retirement age is also 67 years (as of 15 June 2022). The indication of 60 years for Italy in the graphic is therefore incorrect.

The homeowner rate in Germany is the lowest in comparison

Noisy EurostatEU Statistical Office, in 2018, the proportion of citizens who did not rent but lived in their own homes was 51.5 percent in Germany, 72.4 percent in Italy and 65.1 percent in France.

The numbers in the post, which was shared on Facebook, were correct at the time, but are now also obsolete. According to data from Eurostat, the share of homeowners fell to 50.5 per cent in Germany and 64 per cent in France in 2020. In Italy, on the other hand, it rose to 75.1 per cent.

Possible reasons for the low share of home ownership and the appeal of renting in Germany is listed by the Bundesbank in an article: “Higher property transfer taxes make real estate a more expensive and less liquid asset; the lack of opportunity to deduct mortgage interest for owners makes sense in the tax system, but makes financing costs more expensive, and renting public housing, if available, is a cost-effective alternative to home ownership. ”

The housing policy measures in Germany would thus differ “in a special way” from those in other countries. This connection is missing in the posts in social networks.

Conclusion: Figures on pension levels are calculated using different models, and almost all figures are outdated

The figures for the pension level in the figures come from different sources and are calculated using different models. They are outdated and not comparable. Some of the information about retirement age is incorrect and the data on home ownership is outdated.

However, it is true that, according to a current model calculation from the OECD, the net compensation rate for pensions in Germany is lower than in France and Italy, as is the percentage of homeowners.

It is difficult to compare individual specific values ​​of pension and economic systems in different countries because many economic and political factors influence and condition each other. For example, according to the OECD, Italy has a significantly higher net compensation rate, but this does not mean significantly higher pension payments in absolute terms.

Editing: Steffen Kutzner, Alice Echtermann

The main public sources for this fact check:

  • OECD Pensions at a Glance 2017 Report: link (PDF to download)
  • OECD Pensions at a Glance 2021 Report: link (PDF to download)
  • Pension Insurance Report 2018 from the Federal Ministry of Labor: link (PDF)
  • Pension Insurance Report 2021 from the Federal Ministry of Labor: link (PDF)
  • Average pension in euros in Italy according to the Italian social security INPS, per. March 2022: link
  • Information on average pension payments in Germany, Deutsche Rentenversicherung: link (PDF to download)
  • Population distribution by employment, type of household and income group, Eurostat: link

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