Spain’s pension crisis: €13.4 BILLION paid out in March alone

IN the month of March, the Spanish government has paid out in pensions more than double the money set aside for the whole year.

Some 13.4 billion euros left the Treasury in monthly payments. The pension bill continues to rise and once again has broken records in March.

Spain’s Social Security Department estimates the investment allocated to paying the ordinary monthly payroll for contributory pensions at €13.4295 billion, which is 6.3% more than in the comparable month of 2024. With the boost from the pension revaluation approved for this year, of 2.8% in general, and between 6% and 9% for minimum pensions, the data published this Tuesday by the Ministry of Inclusion, Social Security and Migration represents another historic high in this area.

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To put this amount into context, Spain already spends more on this bill in one month than a year on Defence (€12.317 billion), Job Creation (€7.443 billion), or Infrastructure, and Research and Development (more than €8 billion).

According to the same data, the largest amount—around three-quarters—of the March contributory pension payroll went on retirement pensions, with a total expenditure of €9.87 billion, 6.3% more than a year earlier. €2.191 billion was allocated this month to widow’s pensions (€4.2% more), while €1.217 billion was allocated to permanent disability benefits (€10.9%). Some 177.7 million euros (+3.9%) were allocated to orphanhood benefits and 35.9 million euros (+6.5%) to family benefits.

Another factor contributing to the increase in pension spending is the nominal increase in pensions. Social Security paid 10,313,634 pensions in March, 1.7% more than the previous March. Furthermore, the average pension in the Social Security system, which includes the different types of pensions (retirement, permanent disability, widowhood, orphanhood, and family benefits), reached €1,308.2 per month in March, 4.5% more than the same month last year.

The average retirement pension, received by more than two-thirds of all pensioners (6.4 million people), stood at €1,502.2 per month in March, 4.4% more than in the same month in 2024. From another perspective, Social Security data reveal that in the first few months of the year (latest available data), 69,616 new pension applications were registered, of which 11.3% were delayed retirements, more than double the 4.8% increase in 2019.

The problem is, people are living longer. A person who retires at 65 can expect to live another 20-plus years, which is (in terms of revenue) unproductive time. Similarly, young people don’t start earning until they reach their mid-20s.

Fifty years ago, 2.4% of the population went into higher education. Today the figure is nearer 40%. And students don’t pay into the state kitty. The Ministry itself explains that this trend is a consequence of the delay incentives implemented in 2022 and the early retirement reform. (Spain is asking workers to ‘put off’ claiming their pensions, while the government studies legislation to increase the pension-claiming age).

On the other hand, the gender gap reduction supplement continues to rise, reaching 976,975 pensions this month, 88.7% of which are women (866,851). The average monthly amount of this supplement is €75.50. Of the total supplemented pensions, 25% correspond to pensioners with one child (244,457); 47.1% of beneficiaries have two children (460,384); 18.3% receive it for three children (179,139), and 9.5% receive it for four children (92,995).

This supplement, in effect since February 2021, consists of a fixed monthly amount per child, starting with the first child.