Germany should consider raising the retirement age to 69 by 2060, from around 65 now, or risk struggling to honour its pension commitments, the central bank said on Monday.
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While higher premiums could theoretically keep payouts stable, they would “raise the strain on those paying the contributions, and an increasing, high burden of payments overall has negative consequences on economic development”, the Bundesbank wrote.
According to the Bundesbank, current plans to gradually increase the retirement age to 67 between now and 2030 may not be enough for Germany to honour pension commitments.
Germany’s central bank said the national economy has so far shrugged off uncertainty surrounding the U.K.’s vote to leave the European Union, raising hopes that any fallout from Brexit will be contained.
Since then, there have been periodic calls for people in Europe’s biggest economy to work even longer.
It says Berlin should consider raising the retirement age to that level by 2060, from around 65 at the moment.
Chancellor Angela Merkel’s spokesman, Steffen Seibert, said that the government “stands by retirement at 67”.
The Bundesbank said that demographic trends are such that the average age in German society will continue to rise, which will put greater stress on the pension system, and that the government should be accounting for the anticipated change now.
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In the United Kingdom, the state pension age is going to start increasing to 66 for both men and women between December 2018 and October 2020.
