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Discussions about pensions and their indexation to inflation resurface regularly, fueled by economic and budgetary challenges. Since the start of 2024, the government has reported a forecast of deficit of 20 billion euros in public finances. However, the last revaluation of pensions cost the State coffers 14 billion euros.
This economic situation has thus revived the debates on the increase in pensions planned for January 2025. A crucial question arises. What would happen if the government decided not to indexercise pensions on inflation to save money?
An economic and political context
The idea of under-indexing or de-indexing pensions is gaining ground because of the growing budget deficit. Thomas Cazenave, Minister for Public Accounts, highlighted the need to find solutions to fill this gap.
In January 2024, pensions followed a revaluation of 5.3% to match the inflation revealed by theInsee. But with a budget hole of 20 billion euros planned for 2025, the scenario of not increasing pensions at the rate of inflation looms.
To have
This bonus of up to €3,500 that all retirees can receive without knowing it
However, increasing pensions remains essential to preserve the purchasing power of insured persons in the face of increasing prices of goods and services, as stipulated in the Code of Social SecurityDe-indexing pensions, in other words freezing pensions, could then have significant consequences for seniors.
Is the government counting on indexing pensions?
Gabriel Attal, the Prime Minister, recently ruled out the idea of under-indexing retirement pensions for January 2025. He emphasizes in particular that it there is no “hidden plan”. Roland Lescure, Minister of Industry, also denied any intention to under-index pensions.
During his press conference on June 12, Macron also ensured that pensions would be indexed to inflation. This promise comes in a tense political climate, marked by the surprise dissolution of the National Assembly and the early legislative elections.
A disappointment in recent years
The indexation of pensions to inflation aims to preserve the purchasing power of beneficiaries. However, this rule has not always been strictly applied. During his first term, Emmanuel Macron repeatedly increased pensions below the level of inflation.
In 2019, with inflation at 1.5%, the basic pension increased by only 0.3%. The following year, insured persons earning more than 2,000 euros per month saw their pension increase by only 0.3%. However, inflation was 1%.
To have
3 pension increases that will delight retirees at the end of the year and beginning of 2025
Ces undervaluation of pensions led to a loss of purchasing power for many seniors. They deprived them of several dozen euros per month.
Prospects for pension increases in 2025
The future of retirement pensions will depend largely on upcoming budgetary decisions. If the underindexing or total deindexing pensions become a reality, seniors will then have to face a loss of purchasing power.
The debates on indexation are not about to end. Policyholders and their representatives will closely monitor the government decisionshoping that their pensions remain protected against the erosion of inflation.
For the moment, the Emmanuel Macron’s promise indexing pensions to inflation remains a glimmer of hope for many policyholders.
