Beyond the technical language and budget negotiations, a key decision on complementary pensions means many older French citizens are set to feel financially worse off next year, even though their monthly pension amounts will not officially decline on paper.
A Quiet Freeze Impacting 13 Million Retirees
At the heart of this situation is Agirc-Arrco, the mandatory complementary pension scheme for private-sector employees in France. This system adds to the basic state pension and currently supports around 13 million retirees.
Agirc-Arrco is built on a points-based system. Throughout their working lives, employees earn points according to their salary and contributions. When they retire, these points are converted into euros using a value that is normally reviewed each year by unions and employer representatives.
At present, that point value is frozen. Because unions and employers failed to reach an agreement, the value is locked until at least October 2026. This means there will be no automatic pension increase in November 2025, even as inflation continues.
As a result, all Agirc-Arrco recipients will start 2026 with the same complementary pension amounts they received at the end of 2025, forcing retirees to absorb rising living costs without any additional income.
This freeze comes as France tightens public spending following the controversial rise in the legal retirement age and renewed efforts to stabilize social security finances.
Basic State Pension May See Limited Relief
The picture is slightly more complex for the basic state pension. The draft social security budget for 2026 (PLFSS) initially proposed a freeze, triggering widespread concern among retirees.
In response to political pressure, Prime Minister Sébastien Lecornu has suggested the possibility of a partial adjustment. Parliament could approve a modest increase from January 2026, depending on amendments and the broader fiscal situation.
However, the size of any increase remains unclear. It could match inflation, fall short of it, or apply only to the lowest pensions. Until lawmakers vote in autumn 2025, retirees will have no certainty about whether this adjustment will offset the Agirc-Arrco freeze.
What the Freeze Could Cost Retirees
According to the Banque de France, inflation is expected to reach about 1.3% in 2026. While this figure appears modest, frozen pensions still lead to a steady loss of purchasing power.
Specialists estimate that retirees could lose between €130 and more than €340 over the year, depending on their total pension income and how much they rely on Agirc-Arrco. The higher the share of income from the complementary scheme, the greater the impact.
Estimated Annual Income Gaps
- €1,400 net per month: around €11.34 lost each month, or roughly €136 per year.
- €2,800 net per month: about €21 lost monthly, totaling around €252 annually.
- €4,000 net per month: close to €28.32 lost each month, or approximately €340 per year.
These losses do not appear as line items on pension statements. Instead, they quietly reduce spending power as prices rise, effectively acting as a hidden income cut.
Retirees with higher incomes are especially exposed because Agirc-Arrco pensions are not capped. In absolute terms, larger pensions experience the biggest losses.
Key Dates Retirees Should Watch in 2026
- 4 November 2025: Parliamentary debates on the 2026 social security budget (PLFSS) begin, shaping any possible basic pension adjustment from January.
- Autumn 2026: Unions and employers are expected to renegotiate Agirc-Arrco point values, with a potential increase effective from 1 November 2026.
Until these dates pass, the complementary pension point value remains frozen. This certainty allows the government to plan long-term savings, targeting approximately €3.6 billion in social security savings by 2030.
Everyday Consequences for Retirees
Even small monthly reductions in real income can influence daily decisions, such as cutting back on meals out, delaying medical visits, or rethinking financial help for adult children.
While wealthier retirees may absorb these changes more easily, frustration remains widespread. Many have already seen tax advantages disappear and charges on pension income rise, reinforcing the feeling that the retirement balance is shifting.
The impact also extends beyond households. Retirees typically spend a large share of their income locally, supporting shops, pharmacies, and services. Reduced purchasing power can therefore ripple through smaller towns and rural communities.
Key Concepts Explained
- Agirc-Arrco: Mandatory complementary pension for private-sector workers, calculated through a points system.
- Basic pension: Core state pension provided by French social security, separate from Agirc-Arrco.
- Point value: The euro amount assigned to each Agirc-Arrco point, used to calculate annual pensions.
- Revaluation: The annual adjustment of pensions, usually linked to inflation or wage growth.
- PLFSS: The annual social security budget law that defines pension and healthcare spending.
A Typical Retiree Scenario
Take a retiree receiving €2,000 net per month, with €900 coming from Agirc-Arrco. If inflation reaches 1.3% in 2026 and the complementary portion remains frozen, nearly half of their income loses purchasing power. Even if the basic pension rises slightly, it would only partially cushion the impact, leaving inflation largely uncompensated.
