The around 21 million pensioners in Germany can expect a significant increase in their salaries in the coming year. According to official estimates, pensions in West Germany will rise by 5.2 percent and in the East by 5.9 percent in July, according to information from the German Press Agency from the draft pension insurance report 2021.
The German pension insurance wants to inform the public this Wednesday about the expected pension adjustment and its financial situation. This means that pensions in West Germany are likely to rise more sharply than they have been in almost 40 years. In 1983 there was an increase of 5.59 percent. In eastern Germany, pensions last rose in 2016 with an increase of 5.95 percent, comparable to 2022.
This year, the corona pandemic brought retirees a significant increase. In the west there was a zero round, in east Germany an increase of 0.72 percent. The reason was the cyclical slump in premium income. A trend reversal had been emerging for months.
However, the development continues to depend on the pandemic
According to the draft pension insurance report, premium income in the current year to September has risen by around 3.7 percent compared to the same period in the previous year. If the pension increase is now estimated, a monthly pension of 1000 euros, which is based only on western contributions, increases by 52 euros as of July 1st, and the same pension with eastern contributions by 59 euros. According to current estimates, there will also be a significant increase in salaries in 2023. In the west, pensions could then rise by 4.9 percent, in the east by 5.7 percent.
However, the assumptions on economic development and thus also on pension finances are characterized by uncertainty, since the development depends on the effects of the pandemic. The information comes from the pension insurance appraisers group, which consists of pension insurance experts, the Federal Social Security Office and the Federal Ministry of Labor. For the final assessment of the pension finances, the results of the tax estimate have to be awaited. You are expected next week.
The pension estimates assume that the reserve of the pension fund will increase slightly this year. A sustainability reserve of around 37.2 billion euros is estimated for the end of the year. This corresponds to just under 1.6 monthly expenses. At the end of 2020 it was 37.1 billion. It should be noted that “the statutory pension insurance has survived the pandemic very well so far,” according to the draft pension insurance report.