Income Risks within Retirement in Great Britain and Germany

Abstract

This study examines income mobility amongst older people in Great Britain and Germany after retirement. The motivation is that older people may be subject to greater income risks in today's environment of early exits from the labour force, rising longevity and increasing reliance on private pension income. Our results provide evidence that income mobility amongst older people is more pronounced in Great Britain than in Germany. In both countries, the probability of downward income mobility is associated with changes in marital status, living arrangements and the employment status of other family members. A first policy conclusion that can be drawn is the need to strengthen further the social safety net in old age against income risks experienced by groups with few or no individual pension rights.