The National Institute of Statistics (INE) released the final CPI figures for November, confirming the 2024 adjustment to pension contributions. Beginning January 1, 2025, retirees will see their benefits reflected in the payroll using the updated tables.
The period-based increase in contribution-based pensions, the most common type among retirees and currently received by about 10 million people, will align with the average performance of retirees as measured by the CPI. This ensures that purchasing power remains stable in 2023 terms.
For 2024, this marks the third year of the new formula agreed by the former Minister of Participation and Social Security, José Luis Escrivá, with employers and unions. The automatic yearly re-evaluation of contributions results from the calculation of average inflation between December of the previous year and November of the current year. The projected rate for the next year stands at 3.8%.
Hence, if the current average contribution is 1,197.9 euros (based on payroll paid in November), it is expected to rise to about 1,243.3 euros starting January, a roughly 45-euro increase. All pensions awarded for widowhood, temporary disability, or orphanhood will rise at the same rate. The maximum pension share will grow by 3.175 euros, with monthly gross values about 116 euros higher than in 2023.
Spain records the largest number of contributory pensions funded by Social Security, totaling around 6.4 million benefits. Incoming figures show these are followed by retirement pensions, widowhood, permanent disability, and orphan pensions in roughly 2.3 million, 0.9 million, and 0.3 million cases respectively.
Minimum retirement expectations
At present, the non-contributory pension stands at 565.37 euros per month (or 6,784.44 euros per year). The government anticipates a stronger increase for the most vulnerable groups, with roughly half a million people in Spain receiving a non-contributory pension, whether due to minimal rights or disability.
Social Security forecasts an approximate 6.8% rise for next year, around 200 thousand more beneficiaries, though this remains preliminary and is subject to confirmation in the coming weeks. It is possible that non-contributory pensions could rise less than 6.8% if overall inflation ends up lower than earlier government projections.
The amount of the Minimum Vital Income (IMV), which nearly two million people rely on, will also be reassessed for the next year. The available amount ranges from 565.37 to 1,243.83 euros depending on the size of the co-living unit.
Paguillas are disappearing
The new pension calculation system eliminates past adjustments known as pagas compensatorias, used to bridge the gap between the final CPI and the year-start increase. That type of supplementary income was common decades ago but did not appear in 2023, nor in the current year or ahead. As a result, traditional pagas are disappearing from pension slips.