The Central Statistical Office reported on Monday morning that there was a real increase in wages amounted to 5.5% in 2025. Millions of Polish retirees and pensioners were waiting most for this information.
What does an increase in salary matter to them if they are no longer working? Contrary to appearances, it's huge. This is one of the two components of the indexation index.
Let us remind you that seniors will start receiving increased benefits from March 2026. This year, some of them will receive larger transfers even in February.
The indexation rate in 2026 should amount to year 5.3 percent. This is the lowest since 2021, when the rate was 4.24%. In 2023-2024, indexation reached over 14%.
On the other hand, indexation is a mechanism of compensation for the rising costs of living. If it is low, it means that inflation did not bother seniors that much in 2025. At least not as much as in the previous three years. But one step at a time.
How is the indexation index created?
In January, we learned the first of two key indicators for retirees. The Central Statistical Office published inflation data: both the “ordinary” and the “retirement”i.e. characteristic of households where seniors live.
These two indicators are often different. The Central Statistical Office assumes that, for example, families with children have different expenses than pensioners. In the case of the latter, more money goes to, for example, food or medicines. Hence the distinction.
This year it really was like that. The average shopping basket of an “ordinary” Pole increased in price by 3.6% last year, but the purchases of pensioners increased in price by 4.2%. We wrote about it in Business Insider Polska.
The Act on pensions and annuities from the Social Insurance Fund assumes that this is the average annual inflation rate one of two key elementson the basis of which the indexation is calculated. This is to take place in March.
The thing is that the act states quite clearly that when constructing the indexation index, the higher inflation (ordinary or pension) is used. 20% is added to this. real salary increase, i.e. the data we learned today. This is how we obtain the final indexation index.
See also: Do you think you earn well? Check where you are on the income ladder of Poles [KWOTY]
Pension indexation 2026. We know the final index
Ministry of Finance in the budget act for indexation purposes assumed that inflation would amount to 4% and real wage growth (i.e. after taking into account inflation) – 4.4%. This would result in an indexation of 4.88 percent, i.e. 4 percent plus 0.88 percent so one fifth of 4.4 percent.
Today we know that the government exceeded the forecast. Inflation was not 4, but 4.2 percent. Theoretically, the indexation rate could be 0.2 percent. higher and amount to 5.08 percent But there is also another component, i.e. a real increase in wages.
It amounted to 5.5 percent, but it will “contribute” only one fifth of that, i.e. 1.1 percent, to the indexation index. Together, this will give us an indexation of 5.3%.
