The German government has officially confirmed a pension increase for July 2025. Labor Minister Hubertus Heil announced that pensions will rise by 3.74 percent, benefiting around 21 million pensioners nationwide. This increase is slightly higher than the 3.5 percent initially expected in the federal pension insurance report.
The increase is mainly driven by the rise in gross wages and social care insurance contributions. However, it is lower than the 4.57 percent increase pensioners received in 2024. The adjustment is subject to final approval by the cabinet, which has yet to set a date for this decision.
The statutory pension system operates on a pay-as-you-go basis, meaning that current workers’ contributions finance the pensions of retirees. When wages increase, pensions rise accordingly. The following table illustrates the financial impact of the 3.74 percent increase:
Current Pension
Pension from July 2025
Increase
700 euros
726.18 euros
+26.18 euros
800 euros
829.92 euros
+29.92 euros
900 euros
933.66 euros
+33.66 euros
1,000 euros
1,037.40 euros
+37.40 euros
1,100 euros
1,141.14 euros
+41.14 euros
1,200 euros
1,244.88 euros
+44.88 euros
1,300 euros
1,348.62 euros
+48.62 euros
1,400 euros
1,452.36 euros
+52.36 euros
1,500 euros
1,556.10 euros
+56.10 euros
1,600 euros
1,659.84 euros
+59.84 euros
1,700 euros
1,763.58 euros
+63.58 euros
1,800 euros
1,867.32 euros
+67.32 euros
1,900 euros
1,971.06 euros
+71.06 euros
2,000 euros
2,074.80 euros
+74.80 euros
2,100 euros
2,178.54 euros
+78.54 euros
2,200 euros
2,282.28 euros
+82.28 euros
2,300 euros
2,386.02 euros
+86.02 euros
2,400 euros
2,489.76 euros
+89.76 euros
2,500 euros
2,593.50 euros
+93.50 euros
In the past, pension adjustments have varied. Some years, such as 2021 in West Germany, saw no increase due to declining wages. However, a legal safeguard ensures that pensions cannot be reduced, as decreases are offset by future increases.
Looking ahead, uncertainty remains regarding pension reforms. The collapse of the traffic light coalition has stalled plans for a second pension package, which aimed to secure generational capital and maintain pension levels beyond 2025. Without further reform, the pension level could drop to 47 percent by 2030 and continue declining thereafter.
