Old age payments in 2025 will be carried out in a new way: experts revealed details
An important social innovation awaits tens of millions of elderly Russians – recipients of social old-age pensions. Starting next year, 2025, insurance pensions of unemployed citizens will be indexed not once a year, from January 1, as now, but twice — from February 1 and April 1. This was stated in the State Duma of the Russian Federation, recalling at the same time that in essence this means a return to the previous indexation schedule that was in force in the country until 2019. In addition to the schedule adjustment, retirees will face another important change. Indexation will be calculated using a new formula, which, according to preliminary estimates, may turn out to be more profitable for pensioners than the current one. MK found out the details of the upcoming innovations from experts.
Old-age insurance pensions for non-working pensioners will be indexed twice from 2025, reported Svetlana Bessarab in the State Duma Committee on Labor. From February 1, payments will be adjusted by the percentage of inflation, and from April 1 by the percentage of income from the investment portfolio. At the same time, social pensions will continue to be indexed from April 1. In total, there are 43 million recipients of all types of pensions in Russia.
In connection with the announced changes, it is worth recalling that since 2019, insurance pensions for non-working citizens have been indexed once a year from January 1. The indexation percentage was approximately equal to the official inflation rate for the previous year. For example, from January 1, 2024, payments increased by 7.5%, and inflation in 2023 was 7.42%. But starting next year, insurance pensions will be indexed twice — from February 1 and April 1. This is spelled out in the amendments to the law “On Insurance Pensions”, already adopted and signed by the president.
In a sense, this “new” is a half-forgotten “old”. The fact is that before 2019, pensions were also increased twice — from February 1 and April 1. But the indexing formula was different then. From February 1, the entire pension rose to the level of official inflation for the previous year, and from April 1, only the insurance part, namely, the cost of the pension point increased. Moreover, depending on whether the income of the Russian Pension Fund (now the Social Fund) has increased or not. As a result, the pension point increased only once in four years — in 2017. The additional indexation percentage was then 1.5%.
Let us remind you that the insurance pension consists of two parts: a fixed and insurance payment. The fixed part is the same for everyone, while the insurance part depends on the number of pension coefficients (points) that a particular recipient has earned during his working life. The more points and the value of each of them, the higher the insurance payment. In 2025, the first indexation will be similar, but the second will affect both the fixed and insurance parts. It will also be dependent on the growth of Social Fund income, but the formula itself will be different. In particular, as officials explain, they will subtract official inflation from the increase in average wages over the previous year. The result obtained will be an additional percentage of indexation of the insurance pension. For example, the official (according to Rosstat) increase in average wages in 2023 was 14.1%, and official inflation was 7.42%. If the double indexation mechanism had worked already this year, then from April 1, pensioners would have received an additional indexation of 6.68%. As they say, a good increase in pension. But do not delude yourself: last year there was, one might say, an abnormally high increase in wages in the country — it is unlikely to happen again. In any case, for 2025 the government has planned much more modest figures for pension indexation: by 4% from February 1 and by 3.6% from April 1. However, this is only a forecast, which may be adjusted more than once before 2025 — both in one direction and the other.
In the meantime, MK asked experts to comment on the new mechanism for pension indexation.
“The innovation will improve the inflation compensation mechanism for non-working pensioners. Their number as of July 2023 amounted to more than 33.5 million people, according to the Social Fund. For them, a pension is usually the only or main source of income. At the same time, its own individual inflation for such a category may be above average. After all, pensioners mostly buy essential goods and services. And their prices often rise more than the average for the consumer basket. Economists call this “low price elasticity of demand.” Therefore, it is extremely important to flexibly and adequately compensate for the rise in living costs for non-working pensioners.
Indexation of price growth based on the results of the past year remains. It has been happening since February of this year in accordance with Rosstat data. Thus, this year pensioners received an increase of 7.5%, by which consumer prices increased in 2023, according to Rosstat calculations.
But from 2025 this will not be the only increase in pensions. Indexation twice a year – this practice existed until 2019, when the transition period of pension reform began. Now we come back to this. The second, April part is based on the results of investing pension funds. Its size is less certain, since it depends on the situation in the financial markets and the changing level of profitability of their instruments. According to various estimates, for example, from April 2025 the additional amount may amount to several hundred rubles. They will be added to the old-age pension, which averages 23,405 rubles. in 2024, according to the Ministry of Labor.”
“Indexation of pensions has always played a very important role in ensuring a decent standard of living for pensioners and compensating for inflationary losses. Thanks to indexation, pensioners have the opportunity to maintain the purchasing power of their income and not lose on the quality of life, as much as possible in modern realities.
The transition to double adjustment of payments means that indexation of pensions is carried out from various sources. The key here is GDP growth and inflation in the country. Increasing the level of economic development of the country and increasing state revenues make it possible to allocate funds to increase pensions. Additional sources of financing are also possible: reforms in the pension system, increasing tax revenues, using state funds and reserves.
Additional indexation of pensions may be due to factors such as rising wages and labor activity of the population, inflation levels, changes in the demographic situation and the dynamics of the country’s socio-economic development.”