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Pension increase in 2024: Purchasing power analyzed according to inflation rate
What pensions are left after inflation? New figures reveal how pension increases are keeping up with rising living costs. Find out more here.
Pension increase in 2024: Purchasing power analyzed according to inflation rate
Millions of pensioners in Germany are expecting an increase in their pension benefits from July 1st. Despite this increase, the question arises as to whether, given inflation, this actually means an improvement in the financial situation in old age. From 2000 to 2023, consumer prices rose by 54.6 percent, while gross standard pensions rose by 51.4 percent for western pensioners and by 74.0 percent for eastern pensioners.
The standard pension requires that a person has worked continuously for 45 years and earned an average of 3,780 euros gross per month. However, various reasons such as part-time work, time spent raising children or low-wage jobs often mean that the pensions actually paid out are significantly lower. The average pension payment amount was 1,054 euros per month in 2022, which corresponds to an increase of around 52 percent since the turn of the millennium.
The divergence between inflation and pension increases between 2010 and 2020 benefited pensioners due to increased contribution income from the German pension insurance. The federal government's current plans also stipulate that statutory pensions will be increased by 2.6 percent annually until 2037. However, it is pointed out that pensions will no longer be able to keep pace with wage developments in the future. The tax situation of pensioners is also becoming more complex as more and more pensioners become liable to pay taxes, particularly due to increases in pension contributions.
The purchasing power of pension amounts varies considerably depending on where you live. A study shows that the combination of regional pension levels and purchasing power is less favorable in the south of Germany compared to the new federal states. In cities like Regensburg, the monthly purchasing power is only 862 euros. This makes it clear that the cost of living has a significant influence on pension purchasing power.