Behind the technical jargon and budget discussions, a crucial decision on complementary pensions means many older French citizens will effectively feel poorer next year, even if their monthly pension payments don’t appear to decrease on paper.
The Silent Freeze Affecting 13 Million Retirees
At the center of this issue is Agirc‑Arrco, the mandatory complementary pension system for private-sector employees in France. This scheme supplements the basic state pension and serves around 13 million retirees.
Agirc‑Arrco operates on a points system. Workers accumulate points throughout their careers based on salary and contributions. Upon retirement, these points are converted into euros at a value determined annually by unions and employers.
Currently, that point value is frozen. Trade unions and employers failed to reach an agreement, locking the value until at least October 2026. As a result, pensions will not rise automatically in November 2025, despite ongoing inflation.
For all Agirc‑Arrco beneficiaries, 2026 will begin with the same complementary pension amounts as late 2025, meaning retirees face higher living costs without additional income.
This freeze coincides with France tightening public spending after a controversial increase in the legal retirement age and efforts to stabilize social security finances.
Partial Adjustment Possible for the Basic Pension
The outlook is more nuanced for the basic state pension. France’s draft social security budget for 2026 (PLFSS) initially proposed a freeze, sparking widespread concern.
Political pressure has prompted Prime Minister Sébastien Lecornu to hint at a potential partial “thaw.” Parliament could approve a modest increase starting January 2026, depending on amendments and fiscal conditions.
The extent of any increase remains uncertain. It might match inflation, fall below it, or be limited to the smallest pensions. Until lawmakers vote in autumn 2025, retirees will not know what, if anything, might counterbalance the Agirc‑Arrco freeze.
How Much Could Retirees Lose?
The Banque de France projects roughly 1.3% inflation in 2026. Though modest on paper, frozen pensions translate into a gradual loss of purchasing power.
Experts estimate losses could range from about €130 to over €340 for the year, depending on total pension size and reliance on Agirc‑Arrco. The greater the dependency on the complementary scheme, the bigger the impact.
Examples of Annual Shortfalls
- €1,400 net per month: ~€11.34 lost monthly, or €136 annually.
- €2,800 net per month: ~€21 lost monthly, or €252 annually.
- €4,000 net per month: ~€28.32 lost monthly, or €340 annually.
These losses are not itemized on pension statements. They quietly erode spending power as the cost of living rises, effectively acting as a hidden pay cut.
Higher-income retirees are particularly affected since Agirc‑Arrco pensions are uncapped. The freeze disproportionately hits larger pensions in absolute terms.
Key Dates for Retirees in 2026
- 4 November 2025: Parliamentary debates on the 2026 social security budget (PLFSS) begin, determining potential basic pension revaluation from January.
- Autumn 2026: Unions and employers are expected to renegotiate Agirc‑Arrco point values, with a possible increase starting 1 November 2026.
Until these milestones, the complementary pension point remains frozen. This certainty allows the government to plan long-term savings, aiming to carve out roughly €3.6 billion in social security savings by 2030.
Real-Life Implications for Retirees
Even small monthly reductions in real income can affect everyday choices: skipping meals out, postponing medical appointments, or reconsidering financial support for adult children.
For wealthier retirees, the budget absorbs changes more easily, but frustration is common. Many have already faced disappearing tax breaks and higher charges on pension income, heightening the sense that the retirement “contract” is shifting.
The freeze also affects local economies. Retirees often spend a significant portion of income in their communities—supermarkets, pharmacies, and local services. Reduced spending power can ripple through smaller towns and rural areas.
Important Terms
- Agirc‑Arrco: Mandatory complementary pension for private-sector workers, based on a points system.
- Basic pension: Core state pension provided by French social security, separate from Agirc‑Arrco.
- Point value: Euro value assigned to each Agirc‑Arrco point; total points × value = gross annual pension.
- Revaluation: Annual adjustment of pensions, usually to align with inflation or wage growth.
- PLFSS: Annual social security budget law outlining pension and health spending.
Example of a Typical Retiree Impact
Consider a retiree receiving €2,000 net per month, with €900 from Agirc‑Arrco. If inflation reaches 1.3% in 2026 and the complementary portion remains frozen, nearly half of their income loses purchasing power. A partial rise in the basic pension could soften the blow but would not fully offset the inflationary impact.
