The German cabinet has approved plans to encourage people to stay in work longer.

Multiple reports indicate that anyone postponing the start of their retirement will receive a one-off bonus, based on the pension they would have received, if they remain employed for 12 months or longer.

It is understood that the payment will match the amount of pension that person would have received if they had retired, along with a premium because the pension insurance company did not pay contributions on the pension during this time.

According to The Local, a respected source of news within Germany for English speakers, the proposals are still at the draft stage, but it is intended that they will be introduced at the beginning of 2027.

The move is set to stem the bleeding of people working within the country, a figure that Reuters said will have decreased by 6.3m between 2010 and 2030. Statutory retirement is 65.8 in Germany, with this figure set to rise eight years from now to 67.

Germany’s pension scheme has been troubled for some time. Based on three pillars—the statutory pension insurance, occupational pension schemes, and private plans—the country has a rapidly ageing population, with the proportion of the population being over the age of 65 slated to increase from 21 per cent to 29 per cent by the end of the decade. The Federal Statistical Office put that proportion at 15 per cent in 1991.

All this comes against a fraught political backdrop in which the far-right AfD party—which once held a secret event on deporting immigrants en masse back to North Africa—became the dominant political force in the state of Thuringia, absolutely battering current Chancellor Olaf Scholz’s party in the elections.

Concurrently, the AfD also become the second-most popular in the state of Saxony. That situation, the first in decades in which a far-right party has assumed some form of power in Germany, had led to talks of a brandmauer (‘a wall of fire’) to stem the AfD’s success, meaning that the various political parties will agree amongst themselves on how to best block them.

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