Michel Barnier’s government will finally involve retirees in the budgetary recovery effort to the tune of 4 billion, by postponing for 6 months the indexation of pensions to inflation, a politically sensitive subject. The draft budget for 2025, which will be unveiled on October 10, provides for this postponement as part of a massive effort of 60 billion euros in savings. Pensioners will not have a reassessment on January 1 as planned, but on July 1, a six-month postponement which should make it possible to generate “around 4 billion in savings”, the Ministry of Labor told AFP.
The idea of playing on the indexation of pensions to slow down spending had been in the air since the spring. Former Budget Minister Thomas Cazenave had alluded to it in February, but the President of the Republic immediately indicated his opposition. In June, after the dissolution of the National Assembly, Emmanuel Macron insisted. “Pensions will be well indexed to inflation, the purchasing power of retirees, it is not an adjustment variable,” he assured. The solution adopted by Michel Barnier allows retirees to contribute, without completely contradicting the commitment of the President of the Republic.
Unions protest
The CGT quickly denounced, in a press release, an “austerity measure” for retirees, while “small and medium pensions already do not make it possible to maintain the standard of living in the face of energy, food or health costs. The government continues to “pit” workers and retirees, “rather than putting exorbitant capital income to work”, lamented the union. In another press release, Force Ouvrière estimates that since January 2017, retirees have already “lost the equivalent of three months of pension”.
“We always ask the same people to make efforts: those on social security, retirees, through small arrangements to scrounge up a billion […] We never ask anything from employers!”, also criticizes the deputy secretary general of Unsa, Dominique Corona. He regrets that the measure “indiscriminately hits” high and “small pensions”. According to the association Les petits Frères des Poors , 2 million people aged 60 and over live in France below the monetary poverty line (60% of the median income or 1,216 euros for a single person, however, those aged 65-75 are not the most affected by poverty). : 10.6% are affected, compared to 14.4% of the general population.
Better standard of living?
The idea of slowing down the indexation of pensions a little is regularly defended by certain economists and experts. For the latter, French retirees enjoy a better standard of living, compared to working people, than in many other countries. According to the 2024 report from the Retirement Orientation Council (COR), which made a comparison with 11 Western countries, France and Italy thus present the most favorable situation for retirees, with a standard of living of 65 years and more which represents respectively 96 and 98% of that of the entire population. If we take into account housing (imputed rent net of loan interest), the standard of living of retirees even exceeds that of the entire population, at 105%, according to COR figures.
In a way, with this 6-month postponement “we are returning to a revaluation which is also consistent with the income of active people”, indicates to AFP Bruno Chrétien, president of the think tank Institute of Social Protection. “The previous revaluation of 5.3% (January 1, 2023) had been very strong, particularly compared to the average increase in salaries which was 3.5% for active workers,” he underlines.
According to Ifrap, a very liberal think tank, postponements of indexation dates have already been used by the government on several occasions, in 2009, 2014, 2015 and 2018 in particular. “In total, since 2013, pensions will have ‘lost’ 2 years and 9 months of revaluation,” he specified in a note published in June.