Retirement provision: pensions expected to continue rising

The approximately 21 million pensioners are likely to receive increasing salaries in the coming years. A nationwide pension increase of around 3.5 percent is expected next July, as announced by the German Pension Insurance Association in Würzburg. Its chairman Alexander Gunkel confirmed reports from last week. The increase is primarily due to the increase in average wages.

Pension adjustments of 2.6 to 3 percent are expected for the coming years, said Gunkel. This therefore depends on whether the federal government presents a further pension reform package as announced. The pension package announced by the traffic light is planned to permanently secure an existing holding line for the pension level of 48 percent in relation to wages. This so-called holding line currently applies to the security level of the statutory pension until 2025. At the same time, the long-term development of the contribution rate is to be stabilized by building up a capital stock.

Pensions in the East and West had already equalized in the current year, with an increase of 4.39 percent in the West and 5.86 percent in the East. Gunkel stated that the reason for the early adjustment was that wages in the East rose significantly more last year than in the West. Wage growth in 2022 was 4.5 percent in the west and 6.78 percent in the east.

According to Gunkel, the pension insurance expects total income of 375.8 billion euros and expenses of 374.7 billion euros in 2023. “The fact that a surplus can be expected despite the tense economic situation is thanks to the unexpectedly strong increase in income from compulsory contributions for employed people,” said Gunkel. The surplus will be transferred to the pension insurance reserve.