Pensioners will see their pension increase at the beginning of 2025. This was announced on Monday evening, November 11, by the president of the Republican Right (DR) group in the National Assembly Laurent Wauquiez. “There will in fact be an increase in pensions, from January 1st, for all pensions. It will be approximately half of inflation, but it will affect all pensioners”, he declared when invited to the TF1 news program. On July 1st “a second revaluation will then take place, this time for the more modest pensions with a single objective, that of fully protecting them from inflation”, continued the elected representative from Haute-Loire. Or all those who receive a pension lower than the minimum wage.
Amounts that would be counterbalanced by “savings on administrative bureaucracy”
Initially the government had announced a temporary freeze on the increase in pensions, first scheduled for January and then postponed to July. A way to save 4 billion euros, while Michel Barnier announces that he will have to find 60 billion in cuts in the budget planned for 2025. This measure, however, represents a “red line” and an “unfair measure” for the political family, the republicans, from which the prime minister comes. But also for an important part of the hemicycle, given that it was also fought by the National Group but also by the Macronists, and primarily by the leader of the EPR group Gabriel Attal.
Last Tuesday, Budget Minister Laurent Saint-Martin had already hinted that the government was ready to act on the matter. “We want to protect small pensions,” he assures, “that is to say that we will discuss whether to protect themselves from this six-month delay or to compensate in the month of July so that there is no loss of purchasing power in 2025.” The Prime Minister also said he was ready to lift the pension freeze, provided MPs found other ways to make these savings.
According to statements by Laurent Wauquiez, this Monday the gesture in favor of pensioners would cost between “500 million and one billion euros”, counterbalanced by ”savings on administrative bureaucracy”, citing the abolition of agencies such as the High Commissioner for Planning. “There is a billion euros to be unlocked,” he said.
A politically right-wing way of existing
But agreeing to let a National Assembly group president make an announcement of this magnitude in place of a minister remains unprecedented. Although Matignon claims to have “exchanged” with the elected LR. This is one of Laurent Wauquiez’s obsessions: being able to obtain concrete victories for the French, to be attributed to the LR. A politically right-wing way of existing for him, while Interior Minister Bruno Retailleau is increasingly the center of attention. And so as not to give the impression that the LR have dissolved in their temporary alliance with the Macronists. However, this announcement allows the Haute Loire MP to present himself as a defender of the retired electorate, traditionally so dear to the right.
It also comes on the eve of the solemn vote by deputies on the first part of the finance law for 2025, relating to revenue, scheduled for this Tuesday afternoon. It is possible that he will not be voted on; this part of the budget will then be sent back to the Senate on Wednesday, where the right and center have the majority, but in the initial version of the government. With the promise, this time, to save pensioners in the Social Security financing bill. A political gift from Matignon that the right is already rubbing its hands about.
Interview Between Time.news Editor and Pension Expert
Time.news Editor (TNE): Good afternoon, and thank you for joining us today. We have with us Dr. Isabelle Martin, a well-respected economist specializing in pension systems. Dr. Martin, recent announcements from the French government indicate a pension increase for retirees starting January 1st, 2025. Can you outline the key points of this announcement?
Dr. Isabelle Martin (DIM): Good afternoon, and thank you for having me. Yes, the announcement by Laurent Wauquiez is significant. Starting in 2025, pensions will increase roughly half of the inflation rate for all retirees, which is a positive step for millions. Furthermore, in July 2025, there will be an additional revaluation aimed specifically at the more modest pensions, ensuring that those below the minimum wage are fully protected from inflation.
TNE: That’s an important commitment to protect the most vulnerable. However, there has been some controversy regarding the government’s previous plans to freeze the pension increase to save around 4 billion euros. How has this change in direction come about?
DIM: The initial freeze was indeed met with significant opposition, not only from the Republican party but also from other political factions, including the National Rally and some members of President Macron’s party. The strong pushback highlighted the potential unfairness of such measures on retirees, particularly in a time where inflation is already straining purchasing power. The government’s subsequent willingness to reconsider comes as a recognition of this outcry.
TNE: It seems that the government is trying to balance budgetary constraints with social responsibility. How realistic is the claim that savings can be made through reductions in administrative bureaucracy to fund this pension increase?
DIM: Reducing bureaucracy is often cited as a way to save costs, and if planned properly, there can be efficiencies gained. Ideally, measures such as abolishing redundant agencies could indeed free up substantial funds. However, it’s crucial that those savings are implemented effectively, as bureaucratic reductions can take time and may not be a guaranteed in-year solution.
TNE: Wauquiez mentioned that the gesture would cost between 500 million euros and 1 billion euros. With the government’s need to find cuts totaling 60 billion euros, can they realistically achieve this without further compromising other essential services?
DIM: It’s a delicate balance. While raising pensions is commendable, significant cuts elsewhere to accommodate that spending could lead to shortfalls in other critical areas, like health care or education. The government’s challenge will be to prioritize funding and cut inefficient spending while still protecting essential social services. This will require careful planning and oversight to navigate potential pitfalls.
TNE: The government’s favorable stance toward smaller pensions is commendable, but what measures need to be in place to ensure effectiveness and safeguard against future inflation pressures?
DIM: Continuous monitoring and adjustment will be crucial. The government should consider not just one-time increases, but regularly indexed adjustments tied to real inflation rates. Additionally, there must be transparent communication about how pension increases are calculated and funded, so that pensioners can trust in the integrity of the system.
TNE: Dr. Martin, what implications do you see this having on the social landscape as we approach 2025?
DIM: This move could foster greater stability and confidence among retirees, which is particularly vital given the current economic climate. It may also influence public trust towards the government, depending on how effectively these policies are implemented. If executed well, it could serve as a model for balancing fiscal responsibility with social equity, demonstrating a commitment to protect the most vulnerable in society.
TNE: Thank you, Dr. Martin, for your insights. It’s clear that while the path to 2025 comes with its challenges, there’s also a strong opportunity for positive change in the pension landscape.
DIM: Thank you for having me. It’s a crucial topic, and I look forward to seeing how it unfolds.