Michel Barnier’s government is breaking a taboo. Retirees will participate in the national effort. To bring the accounts back into the green, a deficit of just over 5% in 2025, and reduce the debt, pensions will not be revalued to the level of inflation on January 1st as usual. Indexation will take place a little later in the year, in July 2025.
Economical profitable
This delay, which amounts to freezing pensions between January and July, allows the government to save between 3 and 4 billion euros. A substantial effort, since the payment of pensions remains one of the country’s largest expenditure items.
With this announcement, the executive is also counting on a fall in inflation during the first half of 2025, which will allow it to make even more savings than expected. “ This is why the amount of spending reduction on this item is not completely stabilized. Next January, inflation should be around 2% but as the price index slows, it may be around 1.5% next summer », Explains a ministerial source. And this advisor continues: “We can’t say it too much, but retirees were rather well served this year, their general system pension was increased by 5.3% in January 2024… which cost nearly 15 billion euros to the State. »
Budget 2025: 60 billion euros of cuts and tax increases in sight
Politically acceptable
From a political point of view, this shift in indexation to inflation on July 1 will not fail to cause debate. But this sleight of hand also allows the Prime Minister to split the pear in two. Indeed, the Republicans but also Emmanuel Macron are very attached to this increase in the standard of living of the oldest. He chooses not to renounce this indexation, since it will be effective next summer, but to carry it out half-heartedly. An ability which also allows him to justify his decision to bring forward the increase in the minimum wage by 2% to November 1st. Michel Barnier thus displays his attachment to work, and in particular his support for the poorest workers.
Regarding the National Rally and the New Popular Front which regularly point out the purchasing power difficulties of the less well-off retirees, Michel Barnier can always tell them that these categories are not forgotten. Indeed, the small pensions (not exceeding 847.57 euros per month) of retirees who had a complete career were increased at the beginning of October: thanks to the Macron reform of April 15, 2023, nearly 850,000 people benefit from an average increase of 50.94 euros net per month. Another 600,000 had already received a boost last September.
