Business Desk 
Jun 10, 2025
A trader counts Pakistani rupee notes at a currency exchange booth in Peshawar, December 3, 2018. — Reuters
On the sidelines of the federal budget FY26 announcement, Prime Minister Shehbaz Sharif increased government retirees' pensions by 7%.
Under the previous proposal regarding pension increase, the government was mulling over a 10% hike for the next financial year.
Another noteworthy development is that a 10% increase in salaries for government employees was also greenlit by the PM. This latest adjustment was brought about by the PM while dismissing the previous proposal to raise government employees' salaries by 6%.
It's believed that proposals under Pakistan's federal budget 2025-26 will greatly impact the country's salaried class.
It should be noted that the final decision regarding these adjustments was made during the presentation of the annual federal budget for FY26.
The significant increase in pensions comes while public sector employees seeking relief due to rising costs of living.
Following the death of a spouse, the duration of family pension payments would be limited to 10 years. Moreover, the practice of receiving multiple pensions had been abolished.
The finance minister noted that after retirement, individuals rejoining government service would have to choose between salary and pension.
