ISLAMABAD – The federal government has notified a seven percent increase in pensions for retired personnel.
The pension hike will apply to retired civilian employees, armed forces veterans, and members of the civil armed forces, the notification said.
The Ministry of Finance, through an official notification, has clarified that this increase will be effective from July 1, 2025, and will cover those who retire on or after this date.
This decision aims to provide financial relief and improve the welfare of pensioners across various sectors.
Earlier this month, the ministry also issued notifications regarding two key allowances for federal government employees, effective from July 1, 2025.
These include a 10% ad hoc relief allowance and a 30% Disparity Reduction Allowance (DRA) for eligible employees.
“The President has been pleased to sanction with effect from 01.07.2025 and till further orders, an Adhoc Relief Allowance-2025 @ 10% of running basic pay to Armed Forces Personnel, Civil Armed Forces and to all the Civil Employees of Federal Government as well as the civilians paid from Defence Estimates and contract employees employed against civil posts in Basic Pay Scales on standard terms and conditions of contract appointment,” read the notification. The allowance, which will be applicable until further notice, is subject to income tax and will not be considered in the calculation of pension or gratuity.
