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Switzerland's retirees risk losing a whole month's pension

The Local (news@thelocal.com)
The Local ([email protected]) • 22 Aug, 2022 Updated Mon 22 Aug 2022 10:14 CEST
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Swiss pensionista have been hit by rising inflation. (Photo by VALERY HACHE / AFP)

Inflation remains high by Swiss standards, reaching 3.4 percent and placing a heavy burden on workers and pensioners.

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The purchasing power of pensions is falling due to inflation and retirees risk losing a whole month's pension, according to the Swiss Trade Union Confederation (SGB).

In April, Switzerland’s inflation rate stood at about 2.6 percent, but it climbed to 3.4 percent in June.

That’s a significant increase, but the good news (at least for the Swiss) is that this rate is still lower than in many other European countries, where it hovers around 8.6 percent.

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The bad news is that Swiss consumers have noticed their cost of living rising and the purchasing power of their salaries and pensions dropping.

READ ALSO: Cost of living: How can you beat Switzerland’s inflation blues?

Based partly on forecasts calling for the increase in health insurance premiums by 7.5 percent next year, an average pensioner couple could lose between 450 and 500 francs, or 8 percent of their income, in purchasing power.

This prospect “is shocking”, said the SGB’s chief economist, Daniel Lampart, demanding that old-age benefits (AHV / AVS), as well as the second pillar, are automatically adjusted to inflation.

The SGB is also calling for the government to institute a 13th AHV / AVS pension payment, as is the case with Swiss salaries.

READ ALSO: EXPLAINED: Why Switzerland’s inflation rate has stayed low compared to elsewhere

The organisation says that the average AHV pension is just under CHF 1,800 per month, but "you can't live on this in Switzerland", SGB says. So it calls for an "urgent" increase in AHV pensions.

"In addition to the urgently needed general wage increases, the measures demanded by the Swiss Trade Union Confederation - the increase in premium reduction and the rapid inflation compensation of the AHV pensions - must be implemented urgently in Parliament's autumn session", it said.

READ MORE ON RETIREMENT IN SWITZERLAND:

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The Local ([email protected]) 2022/08/22 10:14

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