German Pension Increase 2026 and 2027: What Is Left of the Rise After Deductions

German pension increase 2026: 4.24 percent more since 1 July

Around 21 million people in Germany receive a statutory pension, and on 1 July 2026 they all got the same news: pensions rose by 4.24 percent. The current pension value, the monthly amount one earnings point is worth, increased from €40.79 to €42.52. After 4.57 percent in 2024 and 3.74 percent in 2025, this is the third strong increase in a row.

What lands in your account is less than 4.24 percent, though. Health and long-term care insurance take a share, and anyone who pays tax hands another part of the rise to the tax office. This guide explains step by step how the pension adjustment is set, how much of it remains net and what to expect for July 2027. You can check your own numbers at any time in the pension increase calculator.

How the pension adjustment is calculated

Pensions follow wages. Under § 68 of Social Code Book VI, the key factor is how much gross wages and salaries rose in the previous year. A correction factor adjusts for differences between wage statistics and the earnings actually subject to contributions. The sustainability factor, which reflects the ratio of pensioners to contributors, currently plays no role: the so-called holding line guarantees a pension level of at least 48 percent before tax. The 2025 pension package extended this holding line up to and including the 2031 adjustment.

The procedure is the same every year: in March the Federal Ministry of Labour announces the adjustment rate, in spring the federal cabinet adopts the pension value ordinance, and the Bundesrat approves it. In 2026 that happened on 12 June. Since 1 July 2023 there has been a single pension value for the whole of Germany; East and West are no longer calculated separately.

How much more pension you get before deductions

Because every pension is calculated as earnings points times pension value, every statutory pension rises by exactly the same percentage. That applies to old-age pensions as well as disability and survivors' pensions. A few examples:

You can easily check the amounts yourself: gross pension divided by 40.79 times 42.52. If you have your pension adjustment notice to hand, it shows the exact new payment amount.

What remains of the increase after deductions

Two contributions are deducted from the gross pension of pensioners with statutory health insurance. For health insurance, pensioners pay 7.3 percent, i.e. half the general contribution rate, plus half of their health insurer's additional contribution. The pension insurance pays the other half. The average additional contribution in 2026 is 2.9 percent, so the pensioner's health insurance share is 8.75 percent. Long-term care insurance, on the other hand, is paid by pensioners alone: 3.6 percent, or 4.2 percent for childless people.

At the average additional rate that adds up to 12.35 percent, or 12.95 percent for childless people. Of a €63.62 gross rise, around €55.76 remains net before tax. A higher additional rate at your own insurer reduces the gain slightly. Worth knowing: if your health insurer changes its additional rate, it only takes effect for pensioners after a two-month delay.

Tax: every increase is fully taxable

This is the point many people underestimate. Pensions are taxed on a deferred basis, but only with a taxable share that depends on the year the pension started. Someone who retired in 2018 is taxed on 76 percent; someone starting in 2026 on 84 percent. The tax-free remainder, however, is not fixed as a percentage but as a euro amount in the year after the pension starts: the pension allowance.

The consequence: every later pension increase is 100 percent taxable. With each adjustment the taxable part of the pension grows faster than the pension itself. Tax is only due once taxable income exceeds the basic tax-free allowance, which is €12,348 in 2026. Before that, the €102 lump sum for income-related expenses, the €36 lump sum for special expenses and the health and care insurance contributions paid are deducted, among other things.

An example: a pensioner who retired in 2018 with a gross pension of €1,500 before the increase has taxable income of around €12,190 in 2025, just below the basic allowance. Because of the increase it rises to around €12,530 in 2026. At about €25 a year the tax is small at first, but it grows with every further increase. Our article Does the pension increase make you liable to tax? explains how to check whether you are affected.

The pension value in recent years

The table shows how the current pension value has developed since 2016. Until 2022 the West value is shown; since 1 July 2023 a single value applies to all of Germany.

Over ten years the pension value has therefore risen by around 40 percent. The zero round in 2021 was a result of the pandemic: wages had fallen in 2020, but the pension guarantee rules out a pension cut.

Pension increase 2027: what the forecast says

No decision has been taken yet for 1 July 2027. In its spring 2026 financial estimate, the German pension insurance expects an adjustment of around 4.4 percent. The pension value would then rise to about €44.39. The forecast is driven mainly by the correction factor: in 2025 no more contribution-free inflation compensation bonuses were paid, so earnings subject to contributions rise more strongly than before. For 2028 the same estimate expects only around 2.3 percent.

What ultimately counts are the actual wage figures for 2026, which will be available in spring 2027. All figures for 2027 are therefore forecasts. The calculator has a separate slider for the 2027 increase so that you can try more cautious or more optimistic assumptions.

Special points for survivors' and disability pensions

Survivors' pensions rise by the same percentage. In addition, the allowance up to which your own income is not offset also rises: it is 26.4 times the pension value and therefore climbs from €1,076.86 to €1,122.53 net per month. If your own income exceeds the allowance, 40 percent of the excess is offset. Because the allowance rises, the offset falls, and the survivor's pension can rise by more than 4.24 percent. The widow's pension calculator shows the details.

Disability pensions also rise by 4.24 percent. The supplement for disability pensions that started between 2001 and 2018 is a percentage of the pension and therefore grows automatically.

When the money arrives

The increase applies from the July pension month. Those who retired before April 2004 receive their pension in advance, i.e. at the end of June for July. Everyone else receives it in arrears at the end of the month, so the first increased payment arrives at the end of July. Nobody needs to apply: the adjustment is automatic and comes with the pension adjustment notice.

Conclusion: the gain is real, but smaller than 4.24 percent

The 2026 pension increase brings noticeably more money: at €1,500 gross it is a good €63 a month. After health and care insurance around €56 remains net, a little less if you pay tax. If you are just below the basic allowance, look closely, because every increase is fully taxable. Work through your personal situation in the pension increase calculator. The pension calculator shows how high your future pension will be overall, and if you want to keep working alongside your pension, the active pension calculator gives you an overview.

All information has been carefully checked but does not replace individual pension or tax advice. Only the adjustment notice from your pension insurance provider is binding.