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Germany Confirms 3.74% Pension Increase Starting July 2025

The federal cabinet pledges to maintain the pension level at 48% until 2031, but rising care-insurance contributions will temporarily reduce net payouts in July.

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Overview

  • Germany's statutory pensions will rise by 3.74% on July 1, 2025, benefiting approximately 21 million retirees.
  • The pension level is guaranteed to remain at 48% until 2031, funded by tax revenues rather than increased contributions.
  • Retroactive care-insurance deductions of 4.8% in July will temporarily lower net payouts before normalizing in August.
  • Rising average wages have increased the cost of earning pension points, disproportionately impacting low-income workers and new entrants to the workforce.
  • Experts warn of long-term sustainability challenges, with higher labor costs potentially driving skilled workers out of Germany.