The French government has announced plans to delay the indexing of pensions to inflation by six months, shifting the adjustment date from January 1 to July 1, 2025.

The decision follows a 5.3% increase in pensions at the start of 2024, which was implemented to address high inflation that has since decreased to below 2%.

Laurent Saint-Martin, the French Minister of Budget, expressed support for protecting smaller pensions from the impact of this delay, indicating a desire to ensure vulnerable retirees are safeguarded.

Saint-Martin confirmed that minimum pensions would be increased on January 1, 2025, and discussions in Parliament will decide which pension thresholds will be protected from the freeze.

The proposed pension freeze has faced criticism from various political factions, including the National Rally and labor unions, who argue it will diminish the purchasing power of retirees.

Saint-Martin has ruled out extending the freeze to larger pensions and has also dismissed proposals for additional tax increases to fund the budget measures.

Despite the potential for modifications to the budget text, Saint-Martin emphasized the importance of maintaining a target to reduce the deficit to 5% of GDP by 2025.

Prime Minister Michel Barnier has expressed openness to new ideas during budget discussions to explore alternative savings.

He proposed the idea of establishing a threshold for pension protection, allowing deputies to determine which specific amounts would be exempt from the indexing freeze.

Saint-Martin defended the six-month delay by highlighting that pensions had already been adjusted earlier in the year, despite the current lower inflation rate.

This delay is part of the 2025 budget proposal, which aims to reduce public finances and potentially save 4 billion euros out of a total of 60 billion euros in planned cuts.

To further manage national debt, the government may consider selling state shares in certain sectors as part of its fiscal strategy.