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5d ago

German Cabinet Approves 3.74% Pension Increase Starting July 2025

The adjustment raises the pension value to €40.79, providing an average €66.15 monthly boost for standard retirees, while suspending the demographic sustainability factor until 2031 adds long-term financial challenges.

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Eine geringe Rente oder hohe Kosten für Medikamente: All das kann schnell dazu beitragen, dass Senioren sich verschulden.

Overview

  • Over 21 million statutory retirees in Germany will see their pensions rise by 3.74% starting July 1, 2025, as approved by the federal cabinet.
  • The current pension value will increase from €39.32 to €40.79, translating to an average monthly gain of €66.15 for retirees with 45 contributory years at average earnings.
  • Payments will be implemented automatically but vary by retirement date, with pre-April 2004 retirees receiving the increase in late June and others at the end of July.
  • The suspension of the demographic sustainability factor until 2031 ensures pensions remain at 48% of average earnings but adds approximately €15 billion in annual costs.
  • Germany's pension system faces mounting financial strain due to demographic shifts, capped contributions for high earners, and rising care insurance costs.