Germany: Pensions are increasing – more so in the East than in the West

Pensions are increasing in Germany – by 4.39 percent in the west and 5.86 percent in the east

Pensions in Germany are set to rise

© Sebastian Kahnert/dpa-Zentralbild/DPA

Inflation is causing problems for many pensioners in Germany. It is now clear how much their salary should increase next summer.

Pensioners now know how much more money they will receive each month from the summer. As Federal Labor Minister Hubertus Heil announced on Monday during a visit to Canada, pensions will increase by 4.39 percent in western Germany on July 1 and by 5.86 percent in the new federal states. This means that the current pension value is the same in West and East. Due to the higher wage increase in the east, the east pension adjustment will be achieved a year earlier than legally stipulated. A smaller increase was expected in December.

The basis for the pension increase that has now been announced is the data now available from the Federal Statistical Office and the German Pension Insurance Association.

High inflation is a problem for retirees

Heil said in Ottawa, “These increases are possible because the job market is in good shape and wages are rising.” The security level thus remains stable at over 48 percent. “I want to stabilize the statutory pension in the long term so that people can continue to rely on good old-age provision in the future,” stressed Heil. The statutory pension must remain reliable.

The high inflation is particularly difficult for people receiving small pensions. In February, consumer prices rose by 8.7 percent compared to the same month last year. “The pension adjustment is currently lagging behind inflation, but that is only a snapshot,” said a statement from the Federal Ministry of Labor. The principle that pensions follow wages has proven itself with regard to the income development of pensioners.

“Currently concluded collective agreements provide for considerable wage increases,” the statement said. These would then be reflected in the pension adjustment as of July 1, 2024. The wage increase relevant for the current pension adjustment is 4.50 percent in the old federal states and 6.78 percent in the new federal states.

“The pension is stable and will remain stable”

The president of the German pension insurance, Gundula Roßbach, had already emphasized a very good cash position in an interview with the “Bild am Sonntag” at the weekend. She spoke of a surplus of 3.4 billion euros last year. “The previous collective agreements also give an idea that senior citizens can hope for a pension supplement in the coming years,” said Roßbach. The pension increases depend on the wage development in the country.

“The numbers prove: The pension is stable and will remain stable,” said Roßbach. She cited the increasing number of immigrants and life expectancy as reasons for the development. According to the current calculations of the Federal Statistical Office, this will increase less sharply in the future than previously expected. According to them, pension contributions will remain stable until 2026. Heil had recently assured that the contribution rate would not skyrocket even after the expiry of the upper limit that will apply until 2025, and spoke of a slight increase.


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