From July, the till will ring: pensions will increase by up to 5.86 percent. Around 21 million pensioners in Germany benefit from this. The pension value in East and West will also be adjusted one year earlier than planned. You can find out what this means for you here.
July 2023 will not be a reason for everyone to celebrate. Many employees are left with long-term care insurance because of adjustments less net from gross . But the round 21 million retirees in Germany can get a pension increase be happy.
As announced by the federal government from July 1st Pensioners in Germany more money: the plus is 4.39 percent in the West and 5.86 percent in the east . The pension value in East and West will thus be adjusted one year earlier than planned. The cabinet decision still has to be approved by the Bundesrat.
There is so much more money for retirees
But what does the increase actually bring? Pensioners from the old federal states who, for example, have previously received a pension of EUR 1,000 will receive EUR 1,043.90 from July. Pensioners from the new federal states with a pension of EUR 1,000 receive an increase to EUR 1,058.60.
So far there have been different pension values for East and West. These have been dismantled since July 1, 2018. From July 1, 2024 there should be a uniform pension value, but this goal will now be reached a year earlier.
The pension value is the amount equal to the monthly pension if someone has earned on average for a year and paid pension contributions on it. From July 1, 2023, this will be in East and West Germany uniform 37.60 euros .
According to the German pension insurance, the amount of a pension is calculated based on the acquired pension entitlements, also known as remuneration points. They are multiplied by the current pension value. As part of the pension adjustment, the current pension value is recalculated on July 1 of each year.
Pension increases lag behind inflation
Of course, you are happy to accept an increase, but there is still cause for criticism. High inflation is particularly difficult for people with 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 president of the German pension insurance, Gundula Roßbach, said that the expected high price increase would be mitigated by the pension increase. “Looking back, there has been a significant increase in pensions for pensioners since 2010,” said Roßbach. “So the standard pensions from 2010 to 2022 in the west by more than 32 percent and in the east by more than 47 percent.” The increase was thus significantly higher than the development of inflation in this period.
According to the German Trade Union Confederation, the increase is not enough to fully cushion the increased prices. “But it’s a decent plus in the wallets of pensioners,” said DGB board member Anja Piel of the German Press Agency. (with material from dpa)
