German pensions set to rise about 4.1% in July 2027, draft report shows

Draft estimate for 2027

The federal government expects statutory pensions to rise by 4.09% on 1 July 2027, according to a draft of the pension insurance report for 2026. The Frankfurter Allgemeine Zeitung first reported the figure, and dpa also had access to the document. Roughly 21 million pensioners would be affected by the increase. The number is preliminary, and the final adjustment is set in spring, once the wage data is complete. At 4.1%, a monthly pension of 1,000 euros would rise by about 41 euros.

How the estimate compares with past years

The autumn 2025 estimate for 2026 was 3.73%, while the increase actually paid on 1 July 2026 came to 4.24%. That was half a percentage point above the forecast. Under the new draft, the current pension value would climb from 42.52 to 44.26 euros on 1 July 2027. Handelsblatt calculates that a standard pensioner with 45 contribution years would receive 78.30 euros more per month. The government expects consumer prices to rise 3% in 2027, so pensions would again outpace inflation. Spiegel notes that the new figure sits below the 4.4% assumed in the summer, and that the 48% pension level guarantee in force until 2031 adds to the increase.

Autumn 2025 estimate for 20263.73%

Actual increase on 1 July 20264.24%

Draft estimate for 1 July 20274.09%

Autumn 2025 estimate for 2026

3.73 %

Actual increase on 1 July 2026

4.24 %

Draft estimate for 1 July 2027

4.09 %

Data from the article text

Contribution rate rises from 2028

The contribution rate stays at 18.6% of gross wages in 2027, then rises to 19.7% in 2028 and 19.8% in 2029, according to the draft cited by Welt and Focus. N-tv and Handelsblatt expect 20.0% by 2030. The spring forecast from Deutsche Rentenversicherung had projected 19.9% for 2028 and 20% for 2029, so the new figures are somewhat lower after an improved economic outlook. Focus reports that employers and employees split the additional cost equally. On a gross monthly wage of 4,000 euros, the employee share would move from 372 euros at 18.6% to 394 euros at 19.7%, an extra 22 euros a month. Spiegel adds that the draft projects a rate of 21.0% by 2040.

2027

18.6 %

2028

19.7 %

2029

19.8 %

Data from the article text

Reserve set to shrink

The statutory pension insurance must keep drawing down its reserve. Handelsblatt reports a sustainability reserve of 41.4 billion euros at the end of 2025. The draft projects 31.2 billion euros at the end of 2026, which is about one month of spending. The reserve could drop to about 12.1 billion euros by the end of 2027. Without the contribution increase planned for 2028, it would then fall below the legally required minimum. The calculations already include the pension package adopted in 2025.

End 202541.4

End 2026 (projected)31.2

End 2027 (projected)12.1

End 2025

41.4 billion euros

End 2026 (projected)

31.2 billion euros

End 2027 (projected)

12.1 billion euros

Data from the article text

Outlook to 2040 and open questions

Welt reports that the draft's outlook to 2040 puts cumulative pension growth at 46.5% under unchanged law, an average of roughly 2.8% a year. Possible changes from the reform the coalition plans are not yet included in these figures. Spiegel stresses that the adjustment is still preliminary and will be fixed once the spring statistics are available. Alexander Schweitzer (SPD), named by Handelsblatt as labour minister, put the draft into coordination with the other ministries on Tuesday, 3 November. The next firm figure is therefore due in the spring of 2027.