IntelliJ IDEA 13 uses Java 1.5 despite setting to 1.7

Alternatively, you can apply maven-compiler-plugin with appropriate java version by adding this to your pom.xml:

<build>
    <plugins>
        <plugin>
            <groupId>org.apache.maven.plugins</groupId>
            <artifactId>maven-compiler-plugin</artifactId>
            <configuration>
                <source>1.8</source>
                <target>1.8</target>
            </configuration>
        </plugin>
    </plugins>
</build>

If nothing of this helps (my case), you can set it in your pom.xml, like this:

<properties>
  <maven.compiler.source>1.7</maven.compiler.source>
  <maven.compiler.target>1.7</maven.compiler.target>
</properties>

As this cool guy mentioned here: https://stackoverflow.com/a/25888116/1643465

Please check your project/module language levels (Project Structure | Project; Project Structure | Modules | module-name | Sources). You might also want to take a look at Settings | Compiler | Java Compiler | Per-module bytecode version.

Set also this:

File -> Project Structure -> Modules :: Sources (next to Paths and Dependencies) and that has a "Language level" option which also needs to be set correctly.

[For IntelliJ IDEA 2016.2]

I would like to expand upon part of Peter Gromov's answer with an up-to-date screenshot. Specifically this particular part:

You might also want to take a look at Settings | Compiler | Java Compiler | Per-module bytecode version.

I believe that (at least in 2016.2): checking out different commits in git resets these to 1.5.