Inflation is increasing and money doesn’t go far, so what will happen to Spanish pensions next year?

The government has said it expects them to rise by around 8% in 2023 and has reassured pensioners that they will not lose purchasing power

Agencies

Madrid

Tuesday, 23 August 2022, 14:15

It is something that starts to worry thousands of people in Spain about this time every year: how much will pensions go up by next year? And when will the increase be put into effect? This year, with high inflation meaning that money doesn’t go as far as it used to, it is a particular concern for pensioners. The pension reform which came into force on 1 January this year linked pension revaluation to the average Consumer Price Index between December 2020 and November 2021.

The government forecast is for a pension increase of around 8%, but the revaluation will take place from 1 January 2023 and will be calculated according to the CPI between December 2021 and November 2022.

The Minister for Inclusion, Social Security and Migrations, José Luis Escrivá, reassured pensioners this week that the revaluation in January will be based on the average CPI in November, “even if the figure is 8%”. He pointed out that, in contrast to the increased expenditure, income from contributions is also growing by about 8.5% this year, and the Social Security deficit at the end of 2022 is expected to be 0.5% of GDP.

“The difference between income and expenditure shows that the situation is improving. Parliament passed a law to give total certainty to pensioners and they will not lose out,” he said. “They can be reassured that they will maintain their purchasing power, precisely because it is in situations like these that the protective power of Social Security comes into play, for people who have no flexibility and no way of adjusting their employment situation,” he said.

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