Germany approves Pension increase starting July 1

The pension increase can come into force as planned from July: On Friday, the Bundesrat unanimously approved a corresponding ordinance by the former federal government. The government initiated a 3.74% nationwide pension hike in early May, and it has now officially been approved.

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The approximately 21 million pensioners in Germany will now receive higher pensions from July 1. The increase of 3.74 percent amounts to around 66 euros a month more for a standard pension. The pension increase is above the current inflation rate of two percent, emphasized Mecklenburg-Western Pomerania's Minister President Manuela Schwesig (SPD) in the Bundesrat. “This is important and good news for pensioners.”

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The increase was already set by decree in March by the Federal Ministry of Labor, then still under the leadership of Hubertus Heil (SPD). In May, it was then approved by the federal cabinet following the break-up of the “traffic light” coalition between the SPD and the Greens.

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The pension is adjusted every year on the basis of a fixed pension adjustment formula. The decisive factor here is the development of gross wages in Germany. According to the Ministry of Labor, the increase in wages was 3.69 percent. The pension increase is therefore slightly higher than this figure because other factors are also taken into account in the calculation.

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According to the Ministry of Labor in March, this will result in an increase in the so-called pension value from the current 39.32 euros to 40.79 euros. For a standard pension with average earnings and 45 years of contributions, the pension adjustment therefore means an increase of 66.15 euros per month.