The announcement published at the beginning of the fall caused quite a stir. When presenting the finance bill, the government officially declared that it wanted to postpone by 6 months the date of the next annual revaluation of basic retirement pensions. The latter are in fact theoretically increased each year in order to take inflation into account, thus allowing the 17 million French retirees to maintain their purchasing power.
Instead of benefiting from an increase in their monthly pension on January 1, retirees would have to wait until July 1, 2025. In other words, basic pensions were to remain unchanged until next summer, and the seniors were to continue to receive the same amount as currently, despite the increase in prices.
Justified by the government's policy of budgetary savings, this measure, which was to represent a gain of around 4 billion euros for state finances, aroused strong criticism from the opposition parties. Faced with this reaction, but also with the predictable dissatisfaction of retirees affected by the freezing of their pensions, the government has just reversed course by announcing that the increase in pensions will continue on January 1st.
But this news hides another, less encouraging news for retirees. First of all, because a revaluation based on the inflation rate would in any case be minimal, this rate being currently estimated at around 2% following the slowdown in price increases. Then, because the planned increase will be even lower than this already low rate.
As the Budget Minister, Laurent Saint-Martin, confirmed on France 2 on November 12, the increase in pensions on January 1 will not be indexed to the inflation rate, but to half of it. In other words, the next increase in pensions should not exceed 1%. It could even be slightly lower, according to future estimates, with the minister announcing a rate “probably” equal to 0.9%.
If retirees will therefore benefit from an increase in their income in January 2025, it will therefore be very low. As an illustration, for a retirement pension of €1,200 per month, the increase would represent an increase of only €10 more per month.
Little consolation, however, will concern retirees whose combined amount of their basic and supplementary pensions is less than a net minimum wage, currently estimated at around €1,426. According to comments made on Tuesday by Prime Minister Michel Barnier, the government should implement a second increase in their favor on July 1 as well as compensation for the shortfall linked to the under-indexation of their pension during the first half of the year. 2025.
Despite these compensation measures, retirees constitute one of the targets of the budgetary savings policy that the public authorities intend to implement. In this context, those insured with the highest pensions are particularly targeted. In a recent report, the Council for Compulsory Deductions (CPO), an organization attached to the Court of Auditors, recommended in particular removing the 10% tax reduction on the amount of pensions for retirees with the wealthiest incomes.
