Pensions are increasing at an above-average rate due to high inflation and the associated strong wage development.
(Photo: dpa)
Berlin Pensioners will receive more money 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.
For the pension of an average earner with 45 years of contributions, the monthly increases mean around 71 euros more in the west and a good 93 euros more in the 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.
Heil said in Ottawa: “These increases are possible because the labor market is in good shape and wages are rising.” The level of security 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.
Pension fund is full
“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.
>> Read here: What to look out for when it comes to statutory pensions
The president of the German pension insurance, Gundula Roßbach, had already emphasized the very good cash situation in an interview with “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 premium 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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