How will social security contributions develop up to the year 2040? Our economic team calcu-lated that in 2040, the total social security contribution rate will be 46%, about 6.3 percentage points above the initial level in 2020. More specifically, this means that by the year 2040, con-tribution rates will rise to 23.5% for statutory pension insurance, 17.4% for statutory health insurance, and 3.7% for social long-term care insurance. The demographic decline in unem-ployment, on the other hand, means that the contribution rate in unemployment insurance falls to 1.5%. Demographic aging means that there will be around 33% more people over 66 years old living in Germany in 2040 than there were in 2019 – and around 11% fewer people between the ages of 20 and 66 years old (according to the 14th coordinated population forecast by the Federal Statistical Office). The number of benefit recipients and pension, health, and long-term care insurance beneficiaries is thus increasing significantly, and contribution rates for deposi-tors increasing. The fact sheet commissioned by the Initiative New Social Market Economy (INSM) has now been published. Demographic, economic growth, and legal framework In 2020, social security contributions totalled 39.75% of gross income. The contribution rate for statutory pension insurance was 18.6%, for statutory health insurance it was at 15.7% (including the average additional contribution of 1.1%), for social long-term care insurance it was at 3.05% (without the premium surcharge for childless persons) and unemployment insur-ance was at 2.4%. To calculate what social security contribution rates will be in 2040, current legal regulations were taken into account. However, as the financing of social security depends mainly on de-mographic and economic developments, these two aspects have also been included. By 2040, we expect (real) economic growth of an average of 1.5% per year. The calculated number of 20 to 66-year-olds for each of those aged over 66 years decreases from 3.2 in 2019 to 2.1 in 2040. As a result, the funding base for the pay-as-you-go social system deteriorates. INSM press release (in German) Oliver Ehrentraut’s blog post, in German: “Social security contributions: Without reform, rise to 46%” (INSM website) Watch webinar recording (YouTube) To the calculation (INSM website in German) Authors: Gwendolyn Huschik, Dr. Oliver Ehrentraut, Jan Limbers Do you have questions? Your contact at Prognos Dr Oliver Ehrentraut Partner, Director, Head of Economics Division View profile Gwendolyn Huschik Project Manager View profile Jan Limbers Senior Expert View profile Our work on this topic Take a look at our latest projects and activities. 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