Pension spending exceeds 12,000 million euros for the first time, up 10.8% from 2022

Spain exceeds €12 billion in pension spending for the first time. In July, the regular monthly salaries in pension subject to contributions were exactly 12017762000 euros, up 10.8% over the same month a year earlier. This amount represents 11.7% of Spain’s gross domestic product, according to data distributed this Tuesday by the Ministry of Social Security. This is the same number in 2022 and is lower than in 2021 (12.1%) or 2020 (12.4%), but much higher than in 2019 (10.4%).

Pension spending has increased steadily because there are records. The first data in social security accounting date back to 2005, when at the end of the year Spain spent 4,954 million euros on pensions, less than half of what it is now. This number is constantly growing year by year, reaching 6,868 in 2010, 8,360 in 2015, 9,985,260 in 2020 and 12,018 in July this year. The expectation is that this number will continue to grow, given Jill’s retirement baby boom, high life expectancy (83 years) and low birth rate (1.19 children per woman). Today there are 9,106,289 pension beneficiaries in Spain.

The increase in spending last year, by 10.8% compared to July 2022, is the largest in that period for records. It’s a slightly higher increase. to reassess pensions by 8.5%, approved by the government to avoid losses of purchasing power due to accelerated inflation. It should be noted that the number of pensions has also grown (1.1%), which increases the pressure on the accounts.

By far, the largest increase in pension spending was in July 2008, at 8.3%. In 2022, Spain’s spending on socialist pensions grew by 6.3% and in 2021 by 3.2%.

However, an improving economy limits this increase. The 12,000 million that Spain spends on pensions is 11.7% of GDP, according to social security calculations, the same as last year and less than 2021 (12.1%) and 2020 (12.4%), but much higher than 2019 (10.9%). Government projections are that pension spending will gradually rise to 15%, given demographic projections and recent changes to the system.

The government approved two major amendments to the pension structure through this legislature: in 2021 It linked its reassessment to price evolution (i.e. it proved that the pension should rise every year as the consumer price index rose) and eliminated the factor of sustainability (adjusting the amount based on life expectancy) that PP introduced in 2013; y In March this year The major amendment that improves minimum pensions and increases system income by increasing the contributions of high earners has been approved. With this rise, coupled with the hope of a significant improvement in unemployment, the arrival of migrant workers More workers are choosing to retire laterThe Executive expects to cover the increase in pension spending for the coming years. Unions gave the go-ahead for both reforms, but employers rejected the second because of the contribution hike.

To the expenditures of pensions must be added what is devoted by state coffers to passive categories, that is, mainly military and civilian personnel of the public administration of the state, the administration of justice, public courts and other constitutional or governmental bodies, as well as civil servants transferred to the Autonomous Communities. There is another 2,921.9 million euros, which represents an increase of 312.7 million euros compared to 2022 (nearly 12% more).

The average pension is 1195 euros

In addition to pension spending, the statistics distributed this Tuesday by Social Security hide other relevant data. One of the most telling indicators is the system’s average pension, which is €1,195 per month, €100 more than in 2022 (1090).

The average pension is €1,375.1, with significant differences between employed (1,533) and self-employed (916). The main objective of the reform approved by the Ministry For the self-employed in the citation of their real income is to bridge the gap.

As in the case of salaries, there is also a significant difference between a man’s pension (1,578) and a woman’s (1,077). “In July, 538,856 pensioners received the gender gap supplement, of which 91.2% were women (491,587). The average monthly amount of this additional amount in the pension is 65.7 euros,” the ministry qualified in a press release. The gender gap supplement, in force since February 2021, consists of a fixed amount, after reassessment applied in 2023, of 30.40 euros per month per child, which is applied from the first child, in contrast to the previous maternity supplement

Most of the pensions are for retirement specifically 6,369,023 which is 63% of the total. The second group: 2,352,406 widows, with an average pension of 852 euros. well below the minimum wage (1,080 euros). There are 947,160 pensioners with permanent disability, who earn an average of 1,119 euros per month, and 342,143 orphans, who earn an average of 479 euros.