The new Decree On the Indexation of Labour Pensions signed by President Ilham Aliyev creates another important advancement in strengthening the social protection of 1.1 million pensioners and provides additional support for the welfare of citizens receiving pensions due to age, disability, and loss of a breadwinner.
This was emphasised by Deputy Minister of Labour and Social Protection of the Population Rashad Mustafayev during a briefing dedicated to the indexed increase of pensions under the new Decree of the Head of State.
The Deputy Minister noted that, under the Decree, all pensions were increased by 9.3 percent starting from January 1 of this year, in accordance with the annual growth rate of the average monthly wage for 2025.
He stated that, similar to pension assignments, this increase is implemented proactively and automatically through the electronic system without requiring applications or document submission from pensioners. An additional annual allocation of 640 million manat has been provided for the new pension increases. The new indexation increase exceeds the inflation rate for 2025.
Between 2018 and 2025, the average monthly pension increased from 208 manat to 543 manat, while the average old-age pension rose from 234 manat to 578 manat. With the new increase, the average monthly pension and the average old-age pension have reached 593 manat and 632 manat respectively. Compared to 2018, this represents a 2.8-fold increase in the average monthly pension and a 2.7-fold increase in the average old-age pension.
Overall, significant increases in pensions have been achieved through five social reform packages implemented since 2018 under the instructions of President Ilham Aliyev. The minimum pension has been increased 2.9 times, from 110 manat to 320 manat. For this year, 7 billion 993 million manat has been allocated for pension financing, representing a 2.3-fold increase compared to 2018.
Rashad Mustafayev also noted that, under the new Decree, pension capital recorded in insured persons’ individual accounts as of January 1, 2026 has been increased by 5.6 percent in accordance with the annual consumer price index of the previous year. The increase in pension capital is also carried out automatically through the electronic system.
The annual indexation of pension capital serves as an incentive for individuals actively participating in the social insurance system through employment contracts. They witness that their pension capital grows not only through monthly social insurance contributions but also through annual indexation by the state.
Citizens working in the informal employment sector are encouraged to formalise their employment and obtain pension capital so that they can benefit from annual state indexation increases and secure their future pension rights.
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