How pensions will actually increase in 2025: experts have calculated the size of the surcharge
In Ukraine, as of 1 January 2025, 7.5 million citizens out of a total of 10.3 million pensioners receive retirement pensions. It is for this category that indexation is provided for, which is carried out in accordance with the law on compulsory state pension insurance, -zbilshennya.htm" target="_blank" rel="nofollow noopener">reports OBOZ.UA.
The amount of indexation is calculated according to a special formula, including 50 per cent of the inflation rate for the previous year and 50 per cent of the average growth of wages for three years.
According to the draft budget of the Pension Fund of Ukraine, in 2025 it is planned to carry out indexation at the level of 10 per cent. However, given the higher inflation rate in 2024, experts predict a possible increase to 11 or 12 per cent. The final decision will be made by the government, and due to the budget deficit, it is not worth expecting a significantly higher increase in pension payments.
Will the budget be enough for indexation
In 2024, UAH 502.9 billion was spent on pension payments under this law. The draft budget of the Pension Fund of Ukraine for 2025 includes UAH 528.2 billion, which is 5 per cent more than last year.
The indexation does not apply to pensions recently appointed, as they have not yet had time to depreciate. Also, in some cases, the real allowance may be less than the official indexation rate.
For example, in 2024, the indexation of pensions was 8 per cent, but the average supplement was only 322 hryvnias, although it could be as high as 430 hryvnias with an even increase. In the first four months after the indexation, the average pension increased by only 6.3 per cent.
The government acknowledged problems with the indexation formula
Official documents prepared by the Ministry of Social Policy note that the current indexation system is not perfect. The formula depreciates the size of pensions over time, which makes it necessary to carry out the so-called updating of payments. If the mechanism is not changed, the replacement rate of pensions by salaries will constantly decrease.
Subscribe to our Youtube channel not to miss new videos on acute social issues. Read all the news about pensions in Ukraine in the Social section on Socialportal. In Viber-channel "What's up with social" you will find all the necessary information about updates, reforms and events related to social sphere. Join the channel "What's up there with social" Viber in or in Telegram. Do you have a specific question? Contact SocialGRT!