Retirees in the Valencian Community have seen their income rise by 21 percent over roughly three years of price pressures, averaging an increase of about 234 euros. Data from the National Institute of Social Security show that in August 2021, 630,100 residents in the autonomous community receiving this benefit earned an average of 1,091 euros. By August 2024, the 665,491 beneficiaries were collecting an average of 1,325 euros. [INE]
As a result of the disruption in global supply chains triggered by the COVID-19 pandemic starting mid-2020, prices began to rise clearly toward the end of 2021. The trend worsened notably from February 2022 onward, when Russia invaded Ukraine, pushing up energy and food costs and driving inflation in Spain and other advanced economies. Prices climbed into double digits. In response, the government approved an 8.5 percent pension increase for 2023 to preserve the purchasing power of the affected group. [INE]
Moderation
Over the following months, inflation moderated to about 2.8 percent in Spain last month. Still, the Consumer Price Index (CPI) has risen by 16 percent since August 2021, according to the National Statistics Institute. This means Valencian retirees gained five percentage points of purchasing power over that period. [INE]
But the rise is far from what workers in the same community have experienced. The average gross annual salary there grew from 1,852 euros in the second quarter of 2021 to 1,944 euros in the first quarter of 2024, a gain of 92 euros or 4.9 percent. In other words, retirees earned 126 euros more than workers when considering the past three years of high inflation. [INE]
National comparison
Even with the improvement, Valencia still trails the national average pension, which stands at about 1,444 euros. It also lags behind other regions. The Basque Country leads, with retirees averaging 1,765 euros, followed by Asturias (1,714 euros) and Madrid (1,663 euros). The lowest in the country is Extremadura at around 1,213 euros. In the last year, the pension amount in Valencia rose by 5.18 percent, while the number of pensioners increased by 1.51 percent. [INE]
If you include retirement, permanent disability, widowship, orphan, and dependent relative allowances, the Valencian pension system totals 1,047,964 pensions with an average of 1,159 euros. However, when counting only the primary pensions, the number of beneficiaries falls to 944,832, and women form a slight majority at 468,514. [INE]
The delay in retirement raises mortality risk
Delaying retirement heightens the risk of early mortality, with postponing one year of work significantly increasing the risk of death between ages 60 and 69, especially in physically demanding sectors and jobs with high emotional and mental strain. This finding comes from a study published by the Applied Economics Research Foundation (Fedea), noted by press outlets, which also highlights that the risk is much lower for workers who have access to partial retirement options that allow reducing work hours at a certain age. [CITA]
According to the study authors, restricting or eliminating the option of early retirement would impose a social cost by reducing life expectancy. Using the value of a quality-adjusted life year at age 60 in Spain, a 0.46-year increase in age at death translates into a nontrivial social loss of 8,564 euros per person. [CITA]