The minimum pension will increase to UAH 6,000: the terms of the implementation of the new reform and changes for pensioners

Minister of Social Policy Denys Ulyutin announced plans to increase the minimum pension to UAH 6,000, which is almost 2.3 times the current UAH 2,595, and to implement these changes from January 1, 2026.

However, to implement a massive increase in pensions, hundreds of billions of hryvnias will be needed each year, which are currently not included in the Pension Fund’s budget. Economist Oleg Penzin emphasizes that the reform is not progressing yet. The draft law, which should become a key part of this reform, has not yet been submitted to the Verkhovna Rada and is at the stage of coordination with the trade unions, the IMF, and the ILO, with no set deadlines for completion.

What will change, and who will it affect?

According to experts’ estimates, if the minimum pension reaches UAH 6,000, the maximum pension will increase to UAH 60,000, as it is capped at 10 times the minimum pension. After the introduction of the new point system for calculating pensions, the number of “rich” pensioners will increase, which will require additional costs.

The increase in pensions is scheduled for March 1, 2026, in line with the 2017 pension indexation law, with an expected coefficient of approximately 14%. The reform may begin in the second half of 2026 and last until 2040. The main changes will affect people aged 45 and over, but current pensioners (about 10.17 million) will also benefit.

To whom and by how much the pension will be increased

According to the indicators of the Ministry of Social Policy, in 2027, UAH 6,000 pensions will be received by persons with full insurance experience (34 years), and from 2028, with 35 years of experience. However, this requires appropriate legislative changes and additional resources for the Pension Fund.

The point system for calculating pensions provides for “equalization” of payments based on the length of service and employees’ salaries. A point is awarded for each month worked: 1 point for the average salary, 2 points for a salary twice the average, and 0.5 points for the minimum salary. The value of points increases each year, allowing pensions to be automatically adjusted for inflation.

It is expected that pensions, which currently average UAH 6,544, will increase by 2.5–25%, and minimum pensions by 130%. Pensioners with high payments, for example, 12,000 UAH, will receive about 14,000 UAH; seniority allowances will amount to 150–500 UAH; and the salary will be 1,000–1,500 UAH.

Potential risks

Experts note the following two risks:

Rising prices — pension increases for about 5.6 million pensioners could increase demand for products, causing inflation and exchange rate changes.
Reductions in housing subsidies as low-income pensioners’ incomes rise, and some may lose benefits.
Financing the reform

The main sources of funds for reforms will include:

Contributions from the official salaries of military personnel play an important role in the financing of the PFU.
Changes in economic policy that should stimulate the growth of official earnings.
International aid, which partially covers social benefits, but depends on donors’ conditions.
It is worth noting that, due to income instability, a mass transition to “white” salaries may prove difficult.

Results

Advantages of the reform:

Increase in pensions for 55% of pensioners (5.6 million people) from UAH 150 to UAH 3,400;
Automatic growth of payouts thanks to the points system in the future.
Cons:

The existing threat of inflation and an increase in the value of the dollar;
Reduction or abolition of subsidies for many pensioners.
The main question remains open: where to get the necessary funds for implementing the reform, as there is no quick solution yet.