In Germany, there will be a significant increase in pension benefits starting July 1, with a uniform rise of 4.57 percent in both the east and the west. This adjustment, decided by the Federal Cabinet in Berlin, follows several years of modest increases and is intended to significantly boost the benefits of more than 21 million retirees. A pension of 1000 euros will thus increase by 45.70 euros.

The decision for the increase is based on the positive wage development in Germany. Originally, experts had expected only a 3.5 percent increase in the fall. The current increase is thus significantly above the inflation rates, which were at 2.2 percent in March. Despite the increase, social associations criticize that it is not enough to fully compensate for the loss of purchasing power in recent years.

The Pension Situation in Germany Has Developed Dynamically Over the Years. In the Last Two Years, the Pension Increase Was Below Inflation, and in the Year Before That, There Was No Increase in the West and Only a Minimal One in the East. The Last Significant Increase Above Inflation Was in 2020.

This year marks the first time that the pension adjustment occurs simultaneously in East and West Germany. In previous years, the adjustments had differed; most recently pensions in the West increased by 4.39 percent and in the East by 5.86 percent. This alignment took place more quickly than originally expected, driven by disproportionately strong wage increases in the East.

The Pension Increase Scheduled for 2024 Will Cause Additional Expenditures of Approximately 8.72 Billion Euros to the Statutory Pension Insurance Scheme in the Second Half of the Year Alone, According to a Draft Regulation, and from 2025 Nearly 17.5 Billion Euros in Additional Expenditures Are Expected Annually. These Measures Represent a Significant Financial Burden but Also Reflect the Effort to Adjust Retirees' Living Standards to the General Economic Development.