Pensions will rise 2.5% next year

The pensions will rise 2.5% as of January 1, 2022. Taking into account that the current average pension in Spain is 1.038,49 euros monthly, the average rise will be around 25 euros. The National Institute of Statistics (INE) has published this Monday the advance of the CPI for the month of November, data – once consolidated – that the Government will take as a reference to update these social benefits during the next year. According to the reform designed by the minister Jose Luis Escrivá, pensions will rise each year depending on how inflation has evolved, making the calculation based on the average of the month of December of the previous year with the current November.

A total of 9.9 million pensioners will benefit from this expected increase, which Social Security will have to finish closing once the CPI data is confirmed. The rise in inflation in recent months, driven by the rise in energy, has caused the largest upward revision in recent years. And the 2.5% increase forecast for next year is substantially higher than the 0.9% the previous year.

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In addition to the consolidated increase for next year, another novelty from the ‘Escrivá reform’ is a compensatory ‘pay’ for retirees. This aims to correct the difference between the approved increase for 2021 in inflation that has finally taken place. That is, if the Government raised pensions by 0.9% thinking that that would be inflation, but finally the CPI closed the year at 2.5%; now you must pay the equivalent of those 1.6 points of difference. Which will imply an additional expense for the coffers of the Social Security of about 2,300 million euros.

Currently Spain invests 12% of its gross domestic product (GDP) in paying for pensions; according to the latest data from Social Security.