Indexation is not true: pensions are decreasing instead of increasing

Despite the war and the difficult economic situation, pensions in Ukraine are indexed annually. However, such recalculations are increasingly attracting criticism, as they do not lead to a significant improvement in pensioners’ financial situation and do not account for real price increases.

Danylo Hetmantsev, the chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, spoke about the existing problems with indexation on Ukrainian Radio.

Why is the indexation system ineffective?

Hetmantsev noted that the indexation mechanism is still based on the principles introduced in 2018. He emphasized that the main problem is that the revision of pension salaries is based on an outdated salary base rather than current values.

He explained that indexation depends on the base indicator established back in 2018. This leads to strange situations: if the average salary, on which the pension was based, exceeds the indexed base figure, then indexation is not carried out at all, and when it is, the increase often does not correspond to reality. According to Getmantsev, in 2025, the difference between the real average salary and the one used in the indexation algorithm will reach approximately 49%.

Pensions are actually decreasing.

The parliamentarian emphasized that such recalculations lead to a significant reduction in pensions. For example, a person with 35 years of experience and a real average salary in 2025 could receive about 7 thousand hryvnias. Still, the actual payment for such pensioners is only 3,119 hryvnias, that is, half as much.