Projected Increase in Pensions: What to Expect in 2026

The landscape of pensions in 2026 is set to undergo notable changes, with contributory pensions expected to rise by around 2.7% based on the revaluation formula detailed in the pension reform law. This formula considers the average year-on-year Consumer Price Index (CPI) from December of the previous year to November of the current year, as revealed by the National Institute of Statistics (INE) through recently published preliminary CPI data. The revaluation of contributory pensions, crucial for maintaining purchasing power, is projected to benefit 9.4 million individuals receiving over 10.3 million contributory pensions in addition to those in the State Passive Class Regime. If confirmed by the INE's definitive CPI data scheduled for publication on December 12, this increase could mark a significant uplift from prior increases—2.8% in 2025, 3.8% in 2024, and a notable 8.5% in 2023. A key aspect of the pension reform initiated by former Social Security Minister José Luis Escrivá is the annual adjustment of maximum contribution bases. Effective from 2024, the maximum contribution base will see a rise due to a CPI-based increase plus an additional fixed amount of 1.2 points each year until 2050. Consequently, for 2026, the maximum contribution base might rise by around 3.9%, pushing it to approximately €5,101 per month. Additionally, the maximum pension will experience an increase following the same CPI formula, augmented by an additional 0.115%. This would set the maximum pension at around €33,596 per month for fourteen payments in 2026, up from €32,676 this year. This adjustment aims not only to keep pace with inflation but also to gradually remove caps on the maximum pension by linking it with the CPI plus incremental increases until 2050, allowing for about a 3% rise over that period. In a move designed to enhance equity among pensioners, the government reform also introduces significant improvements in noncontributory pensions to align them with minimum poverty thresholds. For instance, this year noncontributory pensions enjoyed a 9% increase, exceeding the 2.8% boost enjoyed by contributory pensions. By 2026, noncontributory pensions will be further adjusted, aiming to reduce the existing poverty gap by 20% to reach 75% of the poverty threshold for single-person households. Moreover, the government intends to ensure that the minimum contributory retirement pension for holders over 65 years with dependent spouses increases to at least €16,500 annually (€1,178.5 monthly for fourteen payments) by 2027. Similar adjustments will affect the minimum amounts of widow's pensions for family dependents. The continuous updates to minimum pension amounts aim not only to alleviate the financial strain on pensioners but also to ensure more substantial support to vulnerable populations within the pension system. As part of this strategy, noncontributory pensions will see above-average revaluation until they converge with 75% of the poverty threshold by 2027. In summary, the pension reforms enacted in recent years are designed to protect pensioners from the erosive effects of inflation while simultaneously addressing gaps in the pension system that affect those in most need. As we move closer to confirmed CPI data in December, pensioners and stakeholders alike are preparing to see how these developments will unfold in 2026. Related Sources: • Source 1 • Source 2