German pensions to rise by 4,24 percent in July

Retirees across Germany will receive a little more money from their statutory pension from July. Here’s what pensioners need to know:

German gov’t announces pension increases

The German government has announced that statutory pension payments will increase by 4,24 percent from July 1, 2026. The increase, which will benefit around 21 million pensioners in Germany, is slightly higher than a prognosis increase issued in the autumn.

According to the Federal Labour Ministry, this will increase the current pension value (aktueller Rentenwert) from 40,79 euros to 42,52 euros. Why is this figure significant? 

The German pension system is points-based. A year’s contributions at the average earnings of all contributors earns you one “pension point” (Entgeltpunkt). When you retire, your pension points are summed up and multiplied by the current pension value to calculate your pension benefits.

This means that when the new pension value is applied in July, a pensioner who made 45 years of contributions on an average salary will receive an additional 77,85 euros per month. The increase will also apply to sickness pensions (Erwerbsminderungsrente) and survivors’ pension (Hinterbliebenenrente). The 4,24 percent increase must now be ratified by the German cabinet and Bundesrat.

How are German pension increases calculated?

To calculate the pension increase, the Federal Ministry of Labour and Social Affairs uses salary statistics from the Federal Statistical Office (Destatis). 

This is because pensions in Germany are linked to wages. The current working population pays pensions for the current retired population, so if employees receive pay rises, they pay more into the social security system, including the pension system, which increases pension payments.

“The positive wage development is once again leading to a noticeable pension adjustment,” Labour Minister Bärbel Bas (SPD) said in a statement, “which reflects the reliability of the statutory pension”.

Gundula Roßbach, President of the German Federal Pension Insurance Fund (Deutsche Rentenversicherung), said that the increase “means we are once again fulfilling a key promise made by the statutory pension insurance scheme: pensions follow wages”.