Increase in pensions in 2024
In January 2024, the retirement income framework was adjusted to align with the Consumer Price Index. This update aims to protect pensioners’ purchasing power by tying the reference pension amount to inflation, reflecting the most representative annual average prior to that year. The reform is part of a broader plan to reduce gender disparities and to establish a sustainable framework for the public pension system. This plan, set out in Royal Decree 2/2023 of 16 March, introduces a phased expansion of pension rights from 2024 through 2027. The objective is to ensure that pensions do not fall below the poverty line as of those dates and to bring the minimum pension contributions to 60 percent of the median income in Spain by 2027, creating a more resilient social safety net for current and future retirees.
Starting January 1, 2024, the reference pension amount was adjusted by the rate necessary to maintain its real value. This adjustment addresses the existing gap between the base amount of a supplementary pension for those over 65 with a dependent spouse and the poverty line calculated for a household of two adults, as reported by the BBVA Pensions Agency. The change is designed to anchor pension earnings to living costs, reducing the risk that retirees experience a decline in purchasing power over time.
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In addition, the gender gap within pension allocations is targeted by advancing the increase of pension benefits. With the measures in place, pension values are expected to grow by about 10 percent in 2024, helping to close gaps that have affected women more than men in the past. Social Security projections anticipate a more generous minimum pension by 2027, especially for those with a dependent spouse. It is projected that the minimum pension for households with a dependent spouse could reach roughly 16,500 euros per year by 2027, representing a significant increase in annual income for affected retirees.