Pension & health 2025 - changes and opportunities

Léon Eggers
Aug 4
3 min read

2025 brought with it some key legal changes affecting both retirement provision and health and long-term care insurance. Some regulations opened up new possibilities, while others resulted in higher contributions. In this review, I'll show you what specifically changed—and how you (hopefully) benefited from them.

🧾 Retirement planning: More flexibility, more tax advantages

As of January 1, 2025, the contribution assessment ceilings in East and West Germany were standardized—to €8,050 per month and €96,600 per year , respectively. This significantly expanded the tax and social security-favorable framework for occupational pension plans (bAV) .

What specifically applied:

Up to €322 per month could be paid tax-free into a direct insurance or pension fund.
A maximum of €268 of this was exempt from social security contributions .
The tax-free allowance in statutory health insurance for company pension benefits rose to €187.25 per month – a clear advantage for compulsorily insured pensioners.

Those who reacted early were able to adjust their contributions and get more out of their gross income for later.

📈 Basic pension & taxes: Higher deductibility, higher taxation

The special expense deduction for contributions to the basic pension (Rürup) was increased to €29,344 ( €58,688 for married couples ) – a plus for all those who were self-employed or freelance or who generally made a lot of provision.

At the same time, the taxable portion of pensions at the start of retirement rose to 83.5% . This means that anyone receiving their first pension in 2025 had to pay tax on the majority of their statutory pension.

Those who cleverly take this into account in their planning can benefit in the long term despite higher tax liability – especially through targeted combination with private solutions.

🔐 BU & long-term care insurance: More guarantee, better conditions

The maximum actuarial interest rate, which had been frozen for a long time, was increased from 0.25% to 1.0% in 2025 – a real turning point in the insurance market.

This had several positive consequences:

New contracts (e.g. traditional pension or life insurance) could be calculated with higher guarantees.
Premiums for occupational disability and long-term care insurance in particular fell noticeably – while insurance coverage remained the same.

Those who react and review their needs can secure significantly better conditions – especially for new contracts.

🏥 Health insurance: Higher limits, higher premiums

According to the SV Calculation Variable Ordinance, the contribution assessment ceiling (BBG) in health and long-term care insurance in 2025 is 66,150 euros per year (5,512.50 euros per month). For pension and unemployment insurance, it is €96,600 per year (€8,050 per month) . These figures have been in effect nationwide since 2025. The average additional contribution has been increased to 2.5% .

These changes led to rising contributions , especially for high earners – at the same time, switching to private health insurance was even more worthwhile for some.

🧓 Long-term care insurance: More benefits – but also more costs

At the beginning of the year, the benefits of compulsory long-term care insurance were increased by 4.5% – including care allowance, short-term care and day care.

What was particularly exciting was what came into effect from July 2025: The services for preventative and short-term care were bundled into a relief budget of €3,539 per year – more flexible to use, with less bureaucracy.

At the same time, the contribution rate for long-term care insurance was raised to 3.6% , and even to 4.2% for those without children . Parents with multiple children paid correspondingly less.

The year 2025 therefore brought noticeable relief for family caregivers , while working people with rising incomes have to live with higher deductions.

💡 Conclusion: 2025 was a year with opportunities – and with pitfalls

Many of the changes in 2025 were announced – but not everyone took advantage of the new flexibility. Those who addressed the issues in a timely manner were able to: