Pension increase 2027: who could get more from January?

On 1 October, the International Day of Older Persons, Finance Minister András Kármán announced that the minimum old-age pension would be raised to 120,000 forints from 1 January 2027. The lowest benefits would also be linked to a step-by-step, so-called tiered increase affecting pensions below 146,000 forints. Below, we show by band how much extra people could receive and what to watch when doing the calculations.

What did the finance minister announce?

According to the government information, from 1 January 2027 the minimum old-age pension will rise to 120,000 forints, and a tiered increase will be introduced for pensions below 146,000 forints. According to a report by Telex, the minimum pension had remained unchanged at 28,500 forints since 2008, meaning the announced amount is more than four times the current one.

The announcement was made in a video posted on the minister’s social media page. An announcement is not yet a law in force: the final rules will be set out in legislation adopted later, so the details could still change.

The tiered increase at a glance

According to the bands outlined by Telex, the size of the increase depends on the amount of benefit a person receives:

• Below 108,000 forints: the pension would be topped up to 120,000 forints.
• Between 108,000 and 125,000 forints: a monthly increase of 12,000 forints.
• Between 125,000 and 130,000 forints: a monthly increase of 10,000 forints.
• Between 130,000 and 135,000 forints: a monthly increase of 8,000 forints.
• Between 135,000 and 140,000 forints: a monthly increase of 6,000 forints.
• Between 140,000 and 146,000 forints: the amount would be uniformly raised to 146,000 forints.

The most important detail is the starting point. According to the government statement, the tiered increase must be applied not to the current amount but to the sum after the regular, inflation-linked increase in January 2027. So if someone now receives, for example, 106,000 forints, after the January increase the higher amount will count, and that may place them in a different band.

The exact size of the January inflation-linked increase is not yet known, so for now an individual’s expected pension can only be estimated roughly. An analysis by Portfolio also points out that the statutory inflation-linked rise and the tiered increase build on each other.

Worked out: a few illustrative examples

In the examples below, the amounts shown are hypothetical benefit amounts after the January inflation-linked increase. The calculation is based on the announced bands and is for illustration only:

• 95,000 forints: topped up to 120,000 forints, an extra 25,000 forints a month.
• 115,000 forints: with an increase of 12,000 forints, it becomes 127,000 forints.
• 128,000 forints: with an increase of 10,000 forints, it becomes 138,000 forints.
• 132,000 forints: with an increase of 8,000 forints, it becomes 140,000 forints.
• 137,000 forints: with an increase of 6,000 forints, it becomes 143,000 forints.
• 142,000 forints: raised to 146,000 forints, an extra 4,000 forints a month.
• 150,000 forints: the tiered increase would no longer apply to this amount, so only the regular January increase would take effect.

The examples clearly show the logic of the system: the lower the benefit, the larger the extra amount. In the highest band there is a uniform target amount of 146,000 forints so that, after the increase, nobody rises significantly above those who already receive a pension of around 146,000 forints. Exactly which band applies to boundary amounts and round figures will be determined by the wording of the final legislation.

Who would be affected, and what would it cost?

According to the government statement, more than 700,000 people across different forms of benefit would be affected in total. However, this does not mean that this many people currently receive less than 120,000 forints. According to an analysis by Forbes.hu, of them roughly 242,000 may receive an old-age pension or disability benefit below 120,000 forints, while the others are affected through the tiered increase and other benefits. This estimate is not yet official data, so it should be treated with caution.

According to the minister’s announcement, not only old-age pensions would change: orphan’s benefits and benefits for people with reduced working capacity would also increase. Based on András Kármán’s statement, the full package requires 123 billion forints in budget funding. The aim behind the measure is to bring a meaningful improvement in the living standards of those surviving on the lowest benefits, as the current minimum has covered basic expenses less and less in recent years alongside the rise in prices.

What is worth watching until then?

Anyone who wants to assess in advance what to expect should start from their current monthly benefit, then wait to see how large the January inflation-linked increase will be: the band must then be selected on the basis of that new amount. The exact sum will become clear from the January payment and the official notice from the pension disbursement body. As the announced rules are still awaiting adoption in legislation, the details may change. This article is general information, not financial advice; in an individual case, it is worth seeking precise information from the pension disbursement authority or a professional.