Luxembourg pensions to rise by 1.5%

The Luxembourg government has announced a new pension increase that will take effect on 1 January 2026. The indexation will amount to 1.5% and will affect all recipients of pensions under the public social security system. This decision is the result of an annual analysis of changes in taxable wages carried out by the Inspection générale de la Sécurité sociale (Inspection générale de la Sécurité sociale).

Unlike inflationary indexation, which depends on price growth and is regulated automatically by the mechanism of the consumer price index, the January increase is a so-called "mechanical" increase. It reflects the dynamics of the average wage, from which contributions to the pension system are made. Thus, when wages grow in the country, pensions also grow, albeit with some delay.

A similar increase was already made on 1 January 2025, and a few months later - in May - pensioners received an additional increase of 2.5% within the inflation index. Thus, in one calendar year, payments increased by almost 4%, making Luxembourg's pension system one of the most sustainable and generous in Europe.