Spain's average pension climbs to 1,574 euros a month, pushing total bill past 14 billion euros

The rise follows the latest annual pension increase linked to inflation. The measure, introduced as part of the pension reform carried out under José Luis Escrivá, then minister and now governor of the Bank of Spain, raised contributory pension payments by an average of 2.7 per cent this year to compensate for the rise in consumer prices recorded in 2025.

Retirement pensions account for the bulk of the expenditure. Their average value rose by 4.5 per cent over the past year to 1,574.90 euros a month in August, requiring the system to pay out 10.63 billion euros, equivalent to around three-quarters of its total pension expenditure.

The overall figure masks a substantial difference between pensions paid under Spain's General Social Security Scheme and those received by self-employed workers. The average retirement pension for employees covered by the General Scheme stood at 1,733.70 euros a month, compared with 1,062.10 euros for the self-employed.

The disparity has persisted for years, partly because many self-employed workers have opted to make relatively low Social Security contributions. The government tried to address the difference last year by substantially increasing contribution rates, but withdrew the proposal after failing to secure sufficient support from employers' and workers' representatives.

The gap is even wider in some specific Social Security schemes. Average retirement pensions for former coal miners reached 3,004.90 euros a month in August, while those paid under the special scheme for maritime workers averaged 1,739.90 euros.

New retirement pensions awarded have also reached a record level, with an average monthly payment of 1,707.20 euros according to the latest available figures, covering July. The increase reflects the long contribution records and relatively high contributions of the baby boom generation, whose growing presence in the pension system over the coming years is expected to put further pressure on its financial sustainability.

Spain's Social Security system also had more than 136 billion euros of debt as of June, according to the latest Bank of Spain figures. The debt rose 7.9 per cent over the previous year and was equivalent to 7.8 per cent of GDP.

The Spanish state holds most of the liability, having begun injecting funds into the Social Security system a decade ago after it could no longer cover its costs through workers' contributions alone.

The latest increase in pension spending is primarily the result of the inflation-linked adjustment, although successive increases in non-contributory benefits and minimum pensions have also contributed.

Taking retirement, permanent disability, widow's, orphan's and family-related pensions together, the average pension across the system rose by 4.6 per cent year-on-year in August to 1,373.44 euros.