The next pension increase is July 1, 2023. According to one report, the increases are in the mid-single digits. Minister of Labor Heil calls them "noticeable". In view of current inflation rates, however, they cannot prevent German pensioners from becoming poorer.
According to the "Bild am Sonntag", pensioners in Germany can expect an increase in their salaries in the coming year. As the newspaper writes on the basis of the new pension insurance report, pensions are expected to increase by 3.5 percent in western Germany and by 4.2 percent in eastern Germany by July 1, 2023. Federal Labor Minister Hubertus Heil told the newspaper: "According to the data now available, pensioners can again expect a noticeable increase in pensions in the summer."
The average pension payment amount is 1,089 euros per month. According to the newspaper's calculations, that would be 38 euros more in the west and almost 46 euros in the east. Pensions are linked to wages. According to "Bild am Sonntag", the pension experts expect wage growth of 4.5 percent for this year, 5 percent for 2023 and 4.7 percent for 2024. "It is important to me that the pension also benefits from this," the newspaper quoted SPD politician Heil as saying.
Last year, the pension increase was a little heftier. As of July 1, 2022, pensions in western Germany increased by 5.35 percent and in eastern Germany by 6.12 percent. In view of the current inflation rate of more than 10 percent, the increases among pensioners in Germany are unlikely to provide more financial leeway.
According to the report, pensions will increase by a total of 43 percent by 2036. This corresponds to an average growth rate of 2.6 percent per year. The contribution rate will remain stable at 18.6 percent until 2026. In 2027 it will rise to 19.3 percent and by 2030 to 20.2 percent. For 2036, the pension insurance predicts an increase to 21.3 percent.
The pension level is currently 48.1 percent and, according to the pension insurance report, will remain at just over 48 percent until 2024. In 2025 it will fall below that, and then the legal stop line will apply, which states that the pension level must be at least 48 percent and the contribution rate must not exceed 20 percent. If the stop line is not extended beyond 2025, the pension level will drop to 46.6 percent in 2030 and 44.9 percent in 2036.
Minister Heil therefore announced the next pension reform: "Next we will take care of keeping the pension level stable in the long term, well beyond 2026. In doing so, we will also pay attention to the development of contributions. With the build-up of a capital stock, we want to stabilize the contributions in the long term. " Heil is currently negotiating with Federal Finance Minister Christian Lindner.
