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French pensions to be tied to inflation in July, labour minister says

The measure would apply to régime général plans, but must be approved by parliament first 

French pensions will increase if they are tied to inflation, which is at almost 5% year-on-year Pic: Insta_photos / Shutterstock

French pensions are to be tied to inflation from this summer in an effort to increase retirees spending power, France’s labour minister Olivier Dussopt has said. 

“What we want is for this inflation indexation to be valid from July,” he told RTL on Tuesday (May 24). 

Inflation in France reached 4.8% year-on-year in April, and could rise to 5.4% in June, the national statistics bureau Insee states. 

“If we take into account an inflation of 4%, for example, for a pension of €1,200, it is an increase of €45 per month," Mr Dussopt said. 

“This is not insignificant and it enables people to deal with inflation.”

Only French pensions under the régime général, which includes private and public service retirees, will be indexed to inflation. Around 80% of pensioners in France are under this scheme, which is managed by the Caisse nationale d’assurance vieillesse (Cnav).

Mr Dussopt’s comments come after nine pensioners' unions called for an increase in pensions of "at least 4.5%, with retroactive effect from January 1 this year”. 

When will the measure come into effect?

If the measure is introduced in July, it should mean pensions are increased by August 9, Mr Dussopt said. 

However, this measure must still be voted in by parliament to be effective. 

Mr Dussopt said that a draft bill on spending power measures will be put to parliament after the country’s legislative elections, which take place on June 12 and 19, which will contain legislation on linking pensions to inflation.

It is not yet known how long this measure will last for or if it will be permanent as it is in the UK.

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