Budget 2027: Wealthy Retirees and Ministers Affected

The Minister of Economy, Roland Lescure, announced that the government is considering requiring wealthier retirees to contribute more to the recovery of public finances. Two measures are under consideration: an adjustment of high pensions that is lower than inflation and the questioning of the 10% tax deduction on taxable pensions, while small pensions are expected to be preserved. In 2024, old-age benefits reached €426.7 billion, representing 14.6% of GDP. The deficit could reach 6% of GDP by 2027 without new measures, while the goal is to bring it down to around 5%. Furthermore, the government is considering reducing ministers' allowances to demonstrate its commitment to budgetary efforts. Additional social contributions could also be applied to certain bonuses. The situation is politically sensitive with just a few months before the presidential election in 2027, as targeting only high pensions would limit savings, while a broader measure would increase budgetary returns but also the political cost. Trust in the pay-as-you-go system is declining, with 70% of French people deeming it unsustainable in the long term.

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