Six percent or more possible?
Experts expect a substantial increase in pensions for 2024
07/01/2023, 18:01
Pensions are already rising sharply in both East and West this year. Experts think an even bigger jump is possible in the coming year due to rising wages. But they also warn that the issue of pension increases could have been completely dealt with as early as the following year.
After the noticeable increase in pensions this year, experts also expect a strong increase in payments for the coming year. “From mid-2024, pensioners will receive an increase of at least 5.5 to six percent,” says Freiburg social expert Bernd Raffelhüschen in the “Bild” newspaper. The economist Jens Boysen-Hogrefe from the Kiel Institute for the World Economy (IfW) also believes that a six percent increase in pensions in 2024 or even more is possible. “The pension adjustment in the coming year could be even stronger than this year,” Boysen-Hogrefe told the newspaper.
Experts cite rising wages as the reason for the pension increases. “Many wage rates have already been increased significantly this year and will not be passed on to pensioners until next summer,” said Raffelhüschen. “If there are further increases in wage rates this year, pensions could even rise well over six percent.”
However, pension expert Johannes Geyer from the German Institute for Economic Research (DIW) expects the significant pension increases to end soon. From 2025 this could be over, he told the newspaper. Because then there would no longer be a stop line at the pension level, “instead the so-called sustainability factor in the pension formula will take effect”. Then pensions will not rise as much as wages. An increase of more than three or five percent is then “extremely unlikely”. As of July 1, 2023, pensions increased by 4.39 percent in the west and 5.86 percent in the east.