The proposal to increase contributions by 1–2.5% with a freeze for those earning less reopens the debate. The testimony of a retired plumber who continues to work illustrates the pressure on pensions. In recent weeks, contributions from self-employed workers have once again been at the centre of discussions: first because of the outrage, then because of the government’s correction, and now because of the new increase that continues to be discussed. The context? An increase of 1–2.5% with the idea of freezing it for those who earn less.
What does the new increase in contributions mean for self-employed workers and why is it causing discontent again?
The possibility of an increase, albeit moderate, comes after several days of protests and news of relief due to the initial correction. However, the proposal remains in force and keeps the collective, for whom every euro is crucial at the end of the month, in suspense. Will it directly affect you or will you hardly notice it? That will depend on your income. The plan is to freeze the increase for those who earn less, but the concern remains: any increase adds up in the context of adjusted margins.
Who may be most affected and why their pensions tend to be lower at the end of their working life
Many self-employed workers end up looking for additional income because their payments are not comparable to those of salaried workers. In fact, 41% earn less than €27,480 per year (€2,290 per month). And with the average cost of living at around €1,000, not counting rent, the equation becomes more complex. Added to this is the tax burden: on average, 54.4% of gross income goes towards income tax, VAT and contributions. Thus, a self-employed worker earning €30,000 per year may end up setting aside between €12,000 and €16,000 for taxes and contributions. How much is left for savings or to increase their future pension?
Before continuing, let’s move straight on to the four key points that will help you understand the current situation.
- Proposed increase in contributions from 1% to 2.5%, with a freeze for those earning less.
- 41% of self-employed workers with adjusted incomes of less than €27,480 per year.
- The average cost of living is around €1,000 per month, not including rent.
- The average tax burden is 54.4% of gross income, and the pressure continues.
As a result, many are looking for alternative sources of income or ways to save, so they don’t have to rely solely on their state pension.
David’s testimony and investment in the family business to supplement his limited pension
David, a 75-year-old self-employed plumber, continues to work in his business despite being retired. This phenomenon is not unusual in family businesses, where the trade and clientele sustain the lifestyle. He started working for himself at the age of 24 and knows all the ins and outs of this sector.
‘My wife and I worked here, my wife has a pension of €1,000, I have about €500, half, if we hadn’t invested, it wouldn’t be enough.’ His message is clear: without this safety net, it would be difficult to make ends meet. Conclusion? For many, the combination of pension, residual business income and investments has become more a strategy for survival than a choice.
