At the last Council of Ministers meeting of the year, officials approved a pension revaluation aligned with the CPI. The National Institute of Statistics INE has issued the final CPI figures for November, which will serve as the reference for the 2024 pension readjustments. Beginning January 1 of the next year, contributions will rise by 3.8 percent, and retirees will see their benefits reflected in their January payroll using the updated tables.
The rise in contributory pensions, which remain the most widespread among retirees and are currently received by about 10 million people, will follow the general pace of the economy. The CPI-linked increases aim to preserve purchasing power through 2023 values.
For 2024, this marks the third year of the new formula introduced by the former Minister of Social Inclusion and Social Security, Jose Luis Escrivá. An agreement with employers and unions established automatic annual revaluations based on the average inflation between December of the previous year and November of the current year. The agreed rate for the coming year is 3.8 percent.
Therefore, if the average contribution sits at 1,197.9 euros based on the payroll paid in November, it is expected to rise to around 1,243.3 euros from January, an average increase of 45 euros. Pensions that compensate for widowhood, temporary disability, or orphanhood will also rise at the same rate. The maximum contributory pension will grow to 3,175 euros per month, about 116 euros more than in 2023.
In Spain, the largest portion of contributory pensions paid by Social Security consists of ordinary pensions, with about 6.4 million benefits in that category. These are followed by retirement pensions, widowhood, permanent disability, and benefits for orphans, numbering roughly 2.3 million, 0.9 million, and 0.3 million respectively.
Minimum pension increased by 6.9 percent
Currently, the minimum amount of non-contributory pension stands at 565.37 euros per month, or 6,784.44 euros per year. The government has approved a more substantial increase for these benefits set at 6.9 percent. Those most affected by the adjustment are especially vulnerable, and about half a million people in Spain receive either the non-contributory pension or disability-associated benefits.
The Guaranteed Minimum Income also rises by 6.9 percent. The state minimum income, known as the IMV, supports nearly two million people. The monthly amount depends on the number of occupants in the home and ranges from 565.37 euros up to 1,243.83 euros, increasing to a maximum of 604.4 euros to 1,329.6 euros in eligible cases.
Paguillas are disappearing
The new pension calculation system ends older practices such as extra payments meant to bridge the gap between the final CPI figure and the yearly approved increase. These supplementary payments were common in past decades but did not appear in 2023 or in the current year. Traditional paguillas are now phased out from pension statements.