Those who receive only state pension benefits in old age often have to accept a gap between the income they previously earned during their working life and their pension. When additional retirement income and assets are taken into account, homeowner households are able to close this gap much more frequently than tenant households. This is one of the key findings of the study “Owner-occupied residential property as a pillar of retirement provision in Germany – Determining the retirement provision gap for tenants and owners,” which was conducted by the Cologne Institute for Economic Research (IW Köln) on behalf of the Association of Private Builders’ Banks (Verband der privaten Bausparkassen e. V.) and published on December 17, 2025.
The study was based on the results of the 2023 household survey “Private Households and Their Finances.” Methodologically, the study is based on a survey of households’ assets and liabilities and the calculation of the pension gap as the difference between the desired consumption level as a percentage of current net income and the expected net retirement income. In addition to statutory pension insurance (GRV) benefits, company and private pensions as well as liquifiable assets, including owner-occupied residential property, were included in the analysis. With a target level of 80 percent and including all assets, it was found that only 32 percent of owners can expect a pension gap, compared to 68 percent of tenants. On average, owners were able to significantly exceed the target level, even when their real estate assets were valued conservatively.
Furthermore, the analysis showed that owner-occupied properties dominate the portfolios of owners, while tenants hold higher proportions of financial investments, albeit at a significantly lower level. On average, around 28 percent of all households had at least one building society savings agreement, but building society savings were used significantly more often by owners (40 percent) than by tenants. In addition, owners’ building society savings were higher on average than those of tenants.
With regard to policy recommendations, the study states that home ownership acts as a key pillar of retirement provision. According to the authors, a well-designed policy that addresses the equity shortage and takes into account both new construction and existing housing mobility could strengthen the ability of the broad middle classes to provide for their retirement without overheating the markets. In order to improve access to owner-occupied property and thereby reduce the retirement provision gap for a larger proportion of households, they formulate several policy recommendations, including a reform of the real estate transfer tax, the
reduction of further transaction costs, and the strengthening of advance savings, for example through building society savings or a modernized housing subsidy.
“Even if only some of these proposals were taken up and implemented by politicians, it would still be a significant step forward,” says Jacopo Mingazzini, CEO of The Grounds. “Real estate transfer tax has become a real obstacle to property purchases for more and more private buyers, and ideas for reform, such as tax allowances for first-time buyers or differentiation between owner-occupiers and investors, have been under discussion for years. It is time to finally implement them.”
