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Germany Approves 3.74% Pension Increase as Retirement Reforms Loom

Demographic shifts have strained funding, prompting calls to raise the retirement age or broaden statutory contributions.

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Overview

  • The government confirmed a 3.74% rise in statutory pensions effective July 1, 2025, to align benefits with wage growth and inflation.
  • Retirees will receive official adjustment notices between June 14 and July 23, with the increased payments landing in July or August.
  • Lawmakers and experts are debating proposals to raise the standard retirement age and require self-employed individuals and civil servants to contribute to the statutory scheme.
  • Court rulings and retiree lawsuits have exposed instances of double taxation on pension contributions, spurring demands for further legislative fixes.
  • Employment of Germans aged 67 or older reached a record 1.1 million in 2023, underscoring demographic pressures on the pension system.