German retirees will get an inflation-busting pension increase this year

Germany’s Cabinet has approved a 4.57% rise in retirees’ pensionsfrom this summer, an increase that is well above the current inflation rate. Rises in German pensions are linked largely to wage developments. Although Germany’s inflation rate has subsided over the past year, the outcome of salary negotiations in various sectors lately has reflected demands for hefty pay increases following a big increase in living costs. The increase approved Wednesday will take effect on July 1. It is the first time since 2000 that pensions in Europe’s biggest economy have risen by more than the annual inflation rate, which in March stood at 2.2%.