The gap between average and minimum pensions widens in the last four years

The difference between average retirement pensions and the minimum pension, in the case of retirees with a dependent spouse, has widened in recent years despite the higher revaluations of the latter due, among other factors, to the increase in the amount of new registrations.

According to Social Security data, in 2018 the average monthly retirement pension was 1,090.7 euros compared with 810.60 euros per month (11,348.4 in annual calculation of 14 payments) for the minimum retirement pension in the case of those over 65 years of age with a dependent spouse, a difference of 280 euros or 25%.

In 2022, this difference was 364 euros or 29% with an average retirement pension of 1,254 euros compared to 890 euros for the minimum pension (12,467 euros in annual calculation of 14 payments), a gap that is maintained in relative terms by looking at the latest available data for September.

More than 400 euros difference between average and minimum pensions.

In that month, the average retirement pension of the system amounted to 1,376.4 euros, a total of 410 euros more than the 966.2 euros per month of that minimum with a dependent spouse for over-65s (13,526.8 euros per year).

In 2018, the 0.25% automatic revaluation included in the 2013 PP pension reform ceased to apply and a path of rises linked to the CPI began, as well as an additional increase for the minimums that has been reinforced in the latest pension reform in order to guarantee decent amounts.

Taking into account only the revaluations in line with inflation, pensions have risen by a cumulative amount of around 17.6%, plus additional increases for minimum pensions.

But, along with these increases, the average amount of retirement pensions each year reflects the new registrations of contributors with higher salaries.

Thus, the amount of new pension registrations has risen by 9% in the period to an average of 1,439 euros, according to the latest available data, which raises the average to 1,500 euros in the case of delayed pensions, which are still a minority but higher.

The average pension is already close to 1,200 euros.

This set of factors has led to the average retirement pension accumulating an increase of 26% since 2018 and the system average (which includes permanent disability, retirement, widowhood, widower’s, orphan’s and family benefit) is already close to 1,200 euros after increasing by the same percentage with slightly higher rises in the case of widowhood or family benefit pensions.

However, significant differences persist between the different types of pension and with respect to the minimum pensions, a situation that was addressed with the measures included in the last pension reform.

This included an improvement in these pensions inspired by the evolution of the minimum wage with a convergence path for them to rise by an additional percentage to the annual revaluation linked to the CPI.

The aim is for these amounts to rise to 60% of the median income of a two-adult household by 2027 (using the minimum pension with a dependent spouse as a benchmark).

In September, 2.1 million minimum pensions were paid in their various categories, accounting for 21.4% of the total. Half of these, 1.25 million, are retirement pensions, followed by 596,361 widows’ and widowers’ pensions.