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Pension shock for millions of Germans - hardly any prospect of pension increases in 2021

2021-01-25T09:25:30.227Z

There has not been anything like this since 2010: a zero rate for pensions? Now Minister Hubertus Heil has also commented on the prospects for this year.



There has not been anything like this since 2010: a zero rate for pensions?

Now Minister Hubertus Heil has also commented on the prospects for this year.

  • The pension may not be increased this year.

  • In 2021, due to the corona crisis, at least in the west, the German pension insurance company estimated.

    According to a report, Minister Hubertus Heil confirmed these statements.

  • The last time a pension increase was canceled was 2010 - in the year after the financial crisis.

Minister Heil confirms: There is little prospect of pension increases in 2021

Update from January 25th, 2021:

Federal Social Minister Hubertus Heil (SPD) has confirmed statements by the pension insurance that pensioners can hardly hope for an increase in their salaries this year.

"We have to reckon with the fact that there will be no pension increases in the west this year and only a very small one in the east because of the adjustment," Heil told the Düsseldorf "Rheinische Post" (23 January 2021).

The pension development * almost automatically always follows the wage development of the previous year.

In the

corona crisis year 2020

, however, wages hardly increased, as the German Press Agency (dpa) also reported.

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Pension increase in 2021 could fail in the west - Corona crisis year 2020

Update from June 25th, 2020:

After years of pension increases, the usual increase in retirement benefits in western Germany could fail in the coming year, as reported by dpa.

In the east there will probably only be a mini increase of 0.7 percent.

This is the assessment of the CEO of the German Pension Insurance, Alexander Gunkel, writes dpa.

According to the current status, it can be assumed that pensions in the West will not increase in the coming year, he said on Thursday.

According to his assessment, the contributors would have to expect higher contributions after 2021.

The

last time

a

pension increase was

canceled was in 2010 - in the year after the financial crisis, as dpa further reported.

Since then, the pensions have risen every year, sometimes sharply.

From July of this year, too, the approximately

21 million retirees

will receive

 more: 4.2 percent in the east and 3.45 percent in the west.

The basis for the annual adjustment is, among other things, the wage development in the previous year.

The assumptions were now based on falling average wages and a lower number of contributors, said Gunkel according to dpa, with a view to the Corona crisis.

At the same time, he referred to the fact that pension reductions were legally excluded by a protective clause.

The pension insurance explains the likely slight increase in the east compared to the possible zero round in the west with the so-called adjustment staircase, as dpa further reports: By 2024, the pension value in the east will gradually be adjusted to that in the west until it has reached 100 percent.

According to the dpa, a final decision on the pension adjustment as of July 1, 2021 will not be made until next year.

The annual adjustment is usually determined by the federal government by ordinance in spring.

The Federal Council must agree.

Pensioners will get more money from next month

Update from June 12th, 2020:

From 

July

the around 21 million

pensioners

in Germany will get more money.

On Friday a week ago, the Federal Council approved the relevant ordinance.

Accordingly, in the course of the annual

pension adjustment,

according to the German Press Agency (dpa), salaries in the east by 4.2 and in the west by 3.45 percent.

The East pensions are thus further approaching the West pensions.

According to the federal government, the

so-called

standard

pension rises to 1,538.55 euros in the west (plus 51.37 euros) and 1,495.35 euros in the east (plus 60.30 euros), as dpa also reported.

The standard pension is a comparative figure that would arithmetically be given to someone who has paid contributions to the pension fund as an average earner for 45 years.

The pensions had already risen in previous years.

Most recently, salaries rose by 3.18 percent in western Germany and by 3.91 percent in the east.

In 2018 it was 3.22 percent (west) and 3.37 percent (east).

Update from June 2nd, 2020: Pension increase - when the increased pension is paid

Pensioners in Germany will get more money on July 1st

.

The

annual pension adjustment is

responsible for this.

According to a report by T-Online, the German Pension Insurance Association in Berlin points out that the adjustment does not

reach the

account of

all

seniors

at the same time

.

When the

increased pension is

paid depends on the time of the

start of

the

pension

: Those who were

retired

before or in March 2004 will receive the adjusted pension at the end of June, according to the portal.

If the pension started in April 2004 or later, the plus will not be in the account until the end of July.

The

payment

means automatic.

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Article of March 24th, 2020: Cabinet resolves higher pensions on July 1st

The around 21 million

pensioners

in Germany should get

noticeably more money

again in the summer

: On April 22nd, the Federal Cabinet

decided

to raise 

pensions sharply

for July 1st.

According to an ordinance by Social Minister Hubertus Heil (SPD), the pension in West Germany will rise by 3.45 percent, in the new federal states by 4.20 percent.

The East pensions are thus further approaching the West pensions.

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Pension increase in summer 2020 - so much money comes in addition

A

monthly pension of 1,000 euros

, which is based only on

western contributions

, should therefore

increase by 34.50 euros

, an equal

pension with eastern contributions by 42.00 euros

.

The consequences of the corona crisis for the economy have not yet been taken into account in the specifications.

This therefore has no effect on the pending pension increase.

The Federal Council still has to approve the increase.

The increase * for July 1st was announced at the end of March - Heil is now implementing this.

The basis for the pension adjustment is the wage development in the past year.

Contribution trends and the relationship between contributors and pensioners also play a role.

Pensions had also risen in previous years.

Finally, the covers laid

in 2019

in West Germany by 3.18 percent, in the east to 3.91 percent.

In 2018 it was 3.22 percent (west) and 3.37 percent (east).

Also read

: That is why there is a new net amount on your 2020 payslip.

Pensions in the east continue to align with those in the west

The current

pension value

in the east now rises to 97.2 percent of the value in the west.

By 2024, it should gradually reach 100 percent due to a legal requirement from 2017.

The pension value specifically indicates in euros how much one earnings point in the pension insurance is worth.

One earnings point - calculated using a complicated formula - is decisive for the amount of the pension.

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More and more pensioners come for fewer and fewer contributors

But the pension is facing problems because fewer and fewer

contributors come

for more and more retirees.

When today's mid-fifties to mid-sixties of the "baby boomer" age groups retire, there are big gaps in the fund.

Read here

:

Woman (60) is completely shocked - when she learns how much pension she will receive later

Bundestag has decided on a pension package until 2025

The

Bundestag has

decided on

a

pension package

for the period up to

2025

.

It fixes the pension level - i.e. the ratio of a standard pension after 45 years of contribution to wages - at at least 48 percent.

Until then, the contribution rate should not exceed the 20 percent mark.

It is now 18.6 percent.

A commission has just submitted proposals to the federal government for the period after 2025.

It recommends a reform package, but no fundamental restructuring, for example with a higher retirement age.

Heil then announced its own proposals by autumn.

(

ah / soa / dpa / T-Online.de) * merkur.de is part of the nationwide Ippen central editorial network.

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Source: merkur

All life articles on 2021-01-25

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