Plus for retirement benefits
Pension increases in 2024 could be lower than expected
November 1, 2023, 5:19 p.m
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Experts expect a significant increase in pension payments for 2024 in the summer. At that time there was talk of 5.5 to six percent. However, according to a new estimate, the increase is likely to be significantly smaller.
According to an official estimate, pensioners in Germany can expect their salaries to increase by 3.5 percent next summer. This emerges from the federal government’s draft pension insurance report. When asked, a spokesman for the Federal Ministry of Labor said that the report was currently being coordinated by departments.
The value for the increase on July 1, 2024 has not yet been finally determined, but will only be determined in the spring. Pensions are adjusted annually in the summer, taking into account wage developments in the country.
The estimate for the coming year is therefore below the level of the increase from which the approximately 21 million pensioners benefited as of July 1st of this year. At that time, pensions were increased by 4.39 percent in the west and 5.86 percent in the east. Because the pension value in the new federal states was brought into line with the level in the West with this step, the annual adjustment will be the same everywhere in the future.
“No stopping line when it comes to pension levels”
In July, experts expected a significant increase in salaries for 2024. “From mid-2024, pensioners will receive an increase of at least 5.5 to 6 percent,” said Freiburg social expert Bernd Raffelhüschen in the “Bild” newspaper. Economist Jens Boysen-Hogrefe from the Kiel Institute for the World Economy (IfW) also believed a six percent increase in pensions in 2024 or even more was possible. “The pension adjustment next year could be even stronger than this year,” Boysen-Hogrefe told the newspaper.
Pension expert Johannes Geyer from the German Institute for Economic Research (DIW) expects the significant pension increases to end soon. This could end from 2025, he told the “Bild” newspaper. Because then there will no longer be a stopping line for the pension level, “instead the so-called sustainability factor takes effect in the pension formula”. Then pensions will not rise as much as wages. An increase of over three or five percent would then be “extremely unlikely”.