The Pension Fund has released the figures for pension indexation effective March 1.

In March, pensions in Ukraine will be indexed. The Pension Fund has released the indicators that will be taken into account for increasing payments to pensioners, writes ZN.ua.

What indicators are used for pension indexation calculations

The main indicators for calculating the pension increase coefficient are the average salary in Ukraine and the inflation rate for the previous year – 2024.

According to the Pension Fund of Ukraine (PFU), the average salary in Ukraine last year was UAH 17,486.6. If the inflation rate for 2024 was 12%, and the growth rate of the average salary from 2022 to 2024 was 11.05%, then, according to the indexation formula, pensions will be indexed (i.e., increased) by 11.53% starting March 1.

What indexation coefficient is included in the PFU budget

At the same time, the draft budget of the Pension Fund, which was published in January, mentions a pension indexation coefficient of 1.10. This means that a 10% increase in pensions is planned, which is slightly lower than the indicators calculated by the indexation formula.

“The total expenditure amount in the draft budget of the Pension Fund of Ukraine for 2025 has been set at UAH 908.2 billion. This includes considerations for recalculating pensions and monthly insurance payments using the coefficient of 1.10 in 2025,” – stated in the explanatory note for the Pension Fund budget draft.

The final decision regarding the extent of pension increases for Ukrainians is to be made by the Cabinet of Ministers. This decision is expected by March 1, as pensions are to be reviewed next month.

In 2024, the indexation coefficient was 1.079 – pensions were increased by 7.9%. Indexation may be subject to certain limitations. For instance, in 2024, the government set temporary limits on the maximum size of pension indexation – no more than UAH 1,577. The minimum increase was set at UAH 100.

It is worth noting that no applications or appeals to the Pension Fund are required for pension indexation. The process occurs automatically based on individual principles, taking into account the time when a person retires.

Remember that in 2025, there will be no increase in the minimum wage or certain social payments. For more details, read the ZAXID.NET article “What will the minimum wage be in February and what depends on it.”

What is pension indexation

Pension indexation is a mechanism for increasing the amount of pension from the state, allowing for a full or partial compensation for the rising costs of consumer goods and services over the past year.

In other words, it refers to the increase in pensions by the percentage that basic food products, utilities, etc., have risen in price.