Pensions rise more than expected

Mon 20th Mar, 2023

Image by Alexa from PixabayInflation is also causing problems for many pensioners. It is now clear how much their payments will increase in the summer. As Federal Minister of Labor Hubertus Heil announced on the sidelines of a visit to Canada, pensions will increase by 4.39 percent in western Germany and by 5.86 percent in the new federal states as of July 1. This means that the current pension value will be the same in the west and the east. Because of the higher wage increase in the east, the pension adjustment in the east will be achieved one year earlier than legally planned. In December, a smaller increase had been expected.

The basis for the pension increase now announced is the data now available from the Federal Statistical Office and the German Pension Insurance Association. Heil expressed his delight at the development. "These increases are possible because the labor market is in good shape and wages are rising." He added that the security level would thus remain 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," Heil emphasized. The statutory pension must remain reliable, he said. High inflation is particularly hard on those with small pensions.

In February, consumer prices had risen by 8.7 percent compared to the same month last year. "The pension adjustment currently lags behind inflation, but this is only a snapshot," a statement from the Federal Labor Ministry said. The principle that pensions follow wages has proven its worth with regard to the income development of pensioners, it said.

"Collective agreements currently concluded provide for quite considerable wage increases," the statement continued. These would then be reflected in the pension adjustment on July 1, 2024. The wage increase relevant for the current pension adjustment is 4.50 percent in the old states and 6.78 percent in the new states.

The president of the German pension insurance, Gundula Roßbach, had already emphasized a very good cash situation in an interview with Bild am Sonntag over the weekend. She spoke of a surplus of 3.4 billion euros last year. "The wage settlements to date also suggest that senior citizens can hope for a pension increase in the coming years," Roßbach said. Pension increases are based on wage trends in the country. "The figures prove: The pension is stable and will remain stable," Roßbach said.

She cited the rising number of immigrants and life expectancy as reasons for the development. According to the latest calculations by the Federal Statistical Office, the latter will increase less in the future than previously expected. According to her, pension contributions will remain stable until 2026. Heil had recently assured that the contribution rate would not skyrocket rapidly even after the expiration of the cap that applies until 2025, and spoke of a slight increase.

Image by Alexa from Pixabay


German Engineering Jobs
Write a comment ...
Post comment