Unfortunately, poverty in old age is becoming increasingly common among women over 65 and is not a new phenomenon in Germany. Around 20% of pensioners are poor or at acute risk of poverty. All people in Germany who earn less than 60% of the median income of all households are classified as at risk of poverty. The problem: poverty in old age can make people lonely, cause social withdrawal and even shorten their lifespan because they simply don't have the money to participate in society.
More and more people of retirement age are therefore continuing to work, delivering newspapers even though it is physically difficult for them, doing a cleaning job or selling bread rolls in a bakery.
Old-age poverty: why are women so often affected?
Women are affected more often, as on average they only receive half of the money from the statutory pension insurance. While men receive an average pension of 1,148 euros, women only receive an average of 711 euros. This is shown by data from Deutsche Rentenversicherung. In addition, one in four women is financially dependent on their partner. In 2017, 25% of women over 65 lived predominantly from their partner's income. Women living alone lack the support of their partner and therefore receive an average of €900 per month. Women are often unable to close this pension gap and are therefore much more affected by massive poverty in old age
Many women work part-time or mini-jobs for long periods of time, especially during or after pregnancy. Even older generations have often never actively worked. This does not refer to child-rearing, which is a fully-fledged profession, but to employment subject to social insurance contributions. This not only reduces their chances of leading a financially independent life, but also increases the risk of suffering poverty in old age. In particular, working less than 20 hours a week means that women are unable to earn a living on their own and are no longer adequately provided for when they become unemployed or later retire. This is a massive problem!
How can old-age poverty among women be prevented?
In order to prevent poverty in old age, you should protect yourself as early as possible. Retirement provision is a very important topic and should not be underestimated, especially as the state pension is becoming increasingly smaller. You should regularly invest money for yourself so that you can become financially independent. Even small sums that are regularly invested in parallel can make a big difference later on. If you are already affected and your pension is not sufficient, you can have your entitlement to "basic security in old age" checked. This is possible from a monthly income of less than €838.
Preventing poverty in old age: The path to private pension provision
The good old budget book: record all important expenses & income
It's easy to lose track of your regular income and expenditure. However, this is so important in order to see how much money you have left over at the end once the fixed costs have been deducted. You should also keep an eye on monthly fluctuations. It is very helpful to record this cash flow in a budget book. This not only helps you keep track of your finances, but also automatically develops a feel for your finances. The saying applies here: Trust is good, control is better!
Determine your own savings potential in good time
Once you have a good overview of your finances, you should make sure that you have enough left over each month to invest some of it. If this is not the case, you should look through all your contracts. It is often cheaper to change a contract. So if you have had the same car insurance for years, you should take your time and look for another offer. Many insurance policies/contracts have discounts for new customers, which is why it is worth exchanging long-standing insurance policies/contracts. You should also do your tax return regularly if you are not obliged to do so. Because on average, we Germans get up to 1,027 euros back.
Pay off debts: Debts should be paid off
If you have any debts, you should make sure that they are paid off over time. Paying them off quickly will save you expensive interest costs. Even if it is a lot of money at the beginning, which you will then be missing every month, you should take this step, because in the end you will have spent less money overall.
Check your finances: Get started now!
It will take time and effort to get an overview of your own finances. However, it will be worth it and you will be grateful later that you took this step. Nothing beats a good and future-oriented pension plan. So act as early as possible and start now!
