The past few years have been a reason to be happy for pensioners in Germany, as there have been regular pension increases. Pensions have already increased significantly in 2023 and seniors will also receive more money in 2024. The current pension table shows how the increase will affect your wallet. But what will it actually look like in 2025? A look into the future.
When will the pension be increased?
According to the German Pension Insurance, the adjustment of the pension is based on the development of gross wages. If these increase, the pension will also increase.
Furthermore, the changes in the contribution rate in pension insurance and the relationship between contributors and pension recipients are taken into account via the so-called sustainability factor.
Increase in pension 2025: Can pensioners look forward to more money?
Since a pension increase is linked to wage developments, the pension can only increase in 2025 if wages in Germany are increased in 2024. So far the trend looks very positive.
Working people in Germany were able to look forward to rising nominal wages in the first quarter of 2024. These are wages that do not take changes in price levels into account. Inflation or deflation are therefore not taken into account. According to the Federal Statistical Office, the increase was 6.4 percent compared to the same quarter of the previous year. This increase was the second highest year-on-year increase since the series began in 2008.
During the same period, consumer prices rose by 2.5 percent. Real wages, i.e. wages that take inflation into account, rose by 3.8 percent more than in the same quarter of the previous year.
This is the fourth increase in a row and at the same time the strongest year-on-year growth in real wages since 2008.
According to the Federal Statistical Office, the reasons for the increase are the payments of inflation compensation bonuses, the decided wage increases and one-off payments as well as the inflation compensation bonuses in collective agreements.
The conditions for a pension increase look good when looking at the first quarter of 2024. It is not yet possible to say whether the pension will actually increase. That depends, among other things, on how the remaining quarters develop this year. The first forecasts about pension increases for next year are usually made in autumn.
Pension increase 2025: How much will the pension be increased?
As already explained, the conditions for a pension increase are in place because wages rose sharply in the first quarter of this year. However, it is not yet clear whether and how much more money pensioners will receive in 2025.
As a rule, the amount of the pension adjustment is determined by the federal government in a regulation, as the German pension insurance reports. The Federal Council must then approve this.
If the pension is actually increased, seniors can look forward to more money from July 1, 2025
By the way: Not everyone sees the pension increases positively. Economist Bernd Raffelhüschen, for example, is calling for a zero rate for pensioners in 2024. And the economist Monika Schnitzer also warns that pensions should not increase any further in order not to overload the pension system.
