Pension increase 2024: Financial expert provides an overview of pension adjustments and contributions

Pension increase 2024: Financial expert provides an overview of pension adjustments and contributions

According to a report from www.focus.de, the pension increase is set for 2024. Pensions are expected to rise by 3.5 percent in July, reflecting positive wage developments. The contribution rate to statutory pension insurance will remain stable at 18.6 percent in 2024, but is expected to remain unchanged until 2027. However, the government plans to cut the federal subsidy for pension insurance by 600 million euros, which could lead to a faster increase in the contribution rate. Furthermore, the regular age limit increases to 66 years and the taxable pension portion increases to 84 percent. The contribution assessment limit for pension insurance is also increasing. The long-term development of the contribution rate depends on a possible pension reform, on which the government has not yet been able to agree.

The planned cuts in the federal budget's social budget, which could lead to a faster increase in the contribution rate, are expected to have a major impact on the market and the financial sector. An early increase in the contribution rate would mean higher social security contributions, especially for high earners. In addition, the taxable pension portion will be increased, which will lead to a higher tax burden for new pensioners. The cuts could also lead to uncertainty about the long-term stability of pension insurance, which could have an impact on public trust in the pension system.

It remains to be seen how the planned pension reform will be regulated and whether the government will be able to ensure sustainable and stable financing of pension insurance.