The Ministry of Social Security is already preparing the revaluation of contributory pensions which will benefit an estimated 10.3 million contributory benefits, including those of civil servants located in passive classes. The anticipated inflation data known today and government estimates suggest a revaluation of pensions which will be around 2.8% from January 2025. The improvement which will arrive in January will guarantee purchasing power against the increase in premiums because it is protected by law. The final increase will be known on December 13, when confirmed inflation data for November are published.
The estimated cost of the revaluation of contributory pensions will amount to 5.950 million by adding contributions, plus the additional improvement of minimum pensions and the additional protection due to the gender gap. Including non-contributory pensions, the Minimum Vital Income (IMV) and Passive Classes will represent a Total disbursement estimated at 7.166 million in 2025. It will benefit a total of 12.3 million pensions.
Social Security Minister Elma Saiz z stressed that this measure guarantees peace of mind for retirees “who have worked and contributed for decades.” “Increasing your pension is social justice. For me, social justice is that your basket and your life can remain the same, without giving up anything,” he says. The minister stressed that the annual revaluation of pensions “is a commitment of the Spanish government.”
What amount for the increase: 600 euros more for retirees
The revaluation will mean, approximately, 600 euros extra per year for an average pensionwhile average pensions in the system will increase by around 500 euros per year. This increase will benefit the nearly 9.3 million people who receive 10.3 million contributory pensions, in addition to the 720,148 pensions corresponding to the State’s passive class regime, which will also be revalued with the same index.
A retiree who receives a pension of 1,441 euros per month (coinciding with the average retirement pension in 2024) will receive a pension of 1,481.35 euros per month in 2025, which represents an annual increase of 564.87 euros. The formula used to calculate the revaluation for the following year is that established by Law 21/2021 of December 28, by which the guarantee of the purchasing power of pensions and other measures aimed at strengthening financial sustainability was established and social aspects of the public retirement system. .
How is the revaluation calculated?
Social security recovered for the 2022 financial year the updating of benefits with the variation in inflation to guarantee purchasing power after an agreement with the social partners.
The formula used to calculate the revaluation for the following year is that established by Law 21/2021 of December 28, by which the guarantee of the purchasing power of pensions and other measures aimed at strengthening financial sustainability was established and social aspects of the public retirement system. .
Thus, pensions are updated each year according to the increase in prices to guarantee their purchasing power, in accordance with the recommendations of the Toledo Pact, as specified in its 2nd Recommendation.
This practice had become obsolete due to the financial crisiswhen improvements in the income of retirees or civil servants were limited to rationalizing expenses. Later, the PP’s pension reform limited improvements in years when the system was in deficit.
Social Security takes as a reference the National Institute of Statistics (INE) and the inflation data that it updates monthly. To calculate the benchmark index, the Executive takes as a reference the average interannual inflation of the previous 12 months. In this case, according to the average value of inter-annual increases in the CPI for the months of December 2023 to November 2024.
Once all the data regarding the price variation is known, including the confirmation of December 13, the Council of Ministers approves the increase at the end of December. The improvement in pensions will be effective from January.
