The approximately 21 million pensioners in Germany can count on more money in the coming year. According to an official estimate, statutory pensions are set to rise by around 3.5 percent in western Germany and by a good 4.2 percent in eastern Germany in July. This emerges from the draft of the 2022 pension insurance report, which was first reported on by “Bild am Sonntag”. It is also available to the German Press Agency. Minister of Labor Hubertus Heil (SPD) told the “Bild am Sonntag”: “According to the data now available, pensioners can again expect a noticeable increase in pensions in the summer.”
The expected increase in 2023 means an increase of around 35 euros in the west and 42 euros in the east for a pension of 1000 euros. According to the report, pensions are expected to rise by a total of almost 43 percent by 2036. This corresponds to an average growth rate of 2.6 percent per year.
The estimate for 2023 is below the level of the increase that pensioners benefited from on July 1 of this year. In the west, pensions rose by 5.35 percent in the summer and by 6.12 percent in the east. In 2021, the effects of the pandemic were still clearly felt in pensions: in the west there was a zero round, in the east an increase of only 0.72 percent.
The calculations up to 2027 are based on the economic assumptions of the Federal Government of October 12th. They had lowered their forecasts for the economy significantly and projected the economy to shrink by 0.4 percent for around 2023. The results of the tax estimate, which were published on October 27, were also taken into account in the estimates for pensions.
According to the provisional calculation, the contribution rate to the statutory pension insurance system should remain at the current value of 18.6 percent until 2026. Minister Heil told the “Bild am Sonntag” that – contrary to many forecasts – it was possible to keep the contribution rate stable for longer than expected. In the current cost crisis, it is good news “that working people can rely on the fact that the contribution rate will not increase”.
According to the current plans, the 2022 pension insurance report is to be decided in the cabinet on November 30th. The Bundestag and Bundesrat then have to deal with the data.
The left welcomed the expected pension increase, but at the same time called for a clearer adjustment. In view of the rampant inflation, the neglect of pensioners in the federal government’s relief packages and the zero round for pensioners in the pandemic year 2021, it is clear that the increase will do little to change poverty in old age, said party leader Martin Schirdewan on Sunday.
The fact that pensions in eastern Germany are expected to rise by a good 4.2 percent, 0.7 percentage points more than in the west, will not change the disadvantages faced by pensioners in eastern Germany, he said. The pension must protect against poverty, enable a good life and secure the standard of living in old age. “We therefore need a solidary minimum pension of 1,200 euros, a lowering of the retirement age to 65 years, the disadvantages of East German pensioners must finally be ended, and we need a pension insurance for everyone,” said Schirdewan.
Anja Piel, board member of the German Federation of Trade Unions, said that the expected increase shows how strong the pension insurance is “despite all prophecies of doom”, especially in the ongoing crisis. “Pensions always lag behind wages by more than a year; Therefore, in the event of sudden price increases and subsequent higher wage increases, it is not enough if pensions increase significantly by July 2023 or even 2024.” People need further relief or one-off payments now and before July 2023 so that they are not disconnected from prosperity , said the trade unionist.
The social association Germany also complained that the planned adjustment was not sufficient in view of the inflation. “The average old-age pension with us is just under 1,300 euros for 35 years of insurance. The crisis in particular shows that the current pension level of 48 percent is fundamentally too low,” said Chairwoman Michaela Engelmeier. The level needs to be raised quickly to 50 percent, and to 53 percent in the long term.
