Pensions will increase by 5-6% from January

Pensions will rise by 6-5% from January, according to calculations based on a quick estimate of inflation figures for November published this Thursday by the National Institute of Statistics (INE).

The quick estimate puts average inflation over the past 12 months excluding housing at 5.00% in November, which determines next year’s automatic pension renewal using a formula that also takes into account the average annual growth rate. Gross Domestic Product (GDP) for the last two years.

Thus, based on the quick estimate of the consumer price index (IPC), known this Thursday, and also taking into account the data on GDP growth in the third quarter of this year, pensions to 2 IAS, that is, to approximately 1.018. the euro will grow by 6% from January.

Pensions that are two to six times higher than the IFRS value (from 1,018 to 3,055 euros) will be updated by 5.65%.

In turn, pensions that are 6 to 12 times the IFRS value (from 3,055 to 6,111 euros) will be updated by 5% in accordance with inflation, which serves as a benchmark for updating pensions.

The updated values ​​for different pension levels are similar to those already outlined by the government.

The same formula is used to update the IAS, which indicates that this index (which is used to update various social benefits) should increase in January to 509.26 euros.

So in practice, these updated values ​​mean that from January, a pensioner who currently has a pension of €380 gross will receive €402.80, an increase of €22.80 per month.

The €950 pension will increase to €1,007 early next year.

For a pension of 1,900 euros, the increase will be about 107 euros per month, and for a pension of 4,600 euros (which falls in the range from 6 to 12 IAS), the monthly increase will be 230 euros.

The diploma, which defines the rules for updating pensions and other social benefits, stipulates that the average annual growth of GDP for the last two years ending in the third quarter, and the average change for the last 12 months in the price index in Consumer, without housing, vacated in December or November 30, if such amount will not be available on the day of signing the renewal act.

On December 14, INE publishes the final CPI reading for November, confirming or revising the quick estimate published this Thursday.

Over the past few years, the government has resorted to various solutions to increase pensions, and for several years, pensioners whose increase as a result of the renewal formula dictates a lower value have been guaranteed a minimum increase of up to 10 euros.

In 2023, pensions were updated in accordance with the law, but at two different times during the year. In addition, at the end of 2022 there was a lump sum payment of an amount equivalent to half the pension.