March 7, 2021

Pensioners gain purchasing power for the first time since 2015 | Economy


Spanish pensioners have earned this year about a percentage point of purchasing power. It is the first time that they have been able to buy since 2015. The majority of employees also gain purchasing power, due to increases in agreements, and officials, whose salaries in both cases rose more than 2%. Although the CPI accelerated at the end of the year, raising rates in September and October, unknown since 2016, the December rate finally remained at 0.8%, according to the INE on Monday. There are eight tenths below 1.6% that increased pensions with the update at the beginning of the year. The account also goes out to pension recipients if the annual average is taken, which is slightly below 0.7%.

“In 2019, there will be a gain in the purchasing power of pensions for the first time in years,” said the president of the acting Government, Pedro Sánchez, at the press conference after the last council of ministers of 2018, when the royal decree law was passed that raised pensions by 1.6% for the second year in a row. Then, the CPI forecast for the end of 2019 was at 1%, so it was expected that the pensioners would be, at the end of the year, six tenths more wealthy.

In the end, it will be something else. The INE reported on Monday that the CPI for December 2019 was 0.8% year-on-year, four tenths more than in November, due to the increase in fuel prices, which fell one year ago. The acceleration of the end of the year was already foreseen, especially “because of the step effect that occurs when compared with the rates of the end of last year, when there was a sharp drop in fuels,” explains María Jesús Fernández, senior economist at Funcas, the service of studies of the old savings banks In any case, the final arreón was smaller than expected by the institution –provided for a rate of 1.1%-, according to Fernández for the unexpected behavior of light, which has marked this month minimum prices for five years and that it continues in descending trajectory. In December, the average price was 33.8 euros per megawatt / hour, 45.3% lower than the same month of 2018.

In any case, the final push leaves the rate at 0.8%, half of what pensions rose in January. There are eight tenths of purchasing power gain, a joy that pensioners did not carry since the rickety 0.25% of 2015. That year, pensions rose the minimum of 0.25% that marked the reform of the Revaluation Index of the Pensions (IRP) approved by the Government of Mariano Rajoy in 2013, a figure that confronted with stagnant prices (0%).


Pension evolution

* Pensioners who earn less or more than 1,000 euros.

** November data, in%. Since 2012, when pensions cease to be linked to the CPI, the December figure is taken as a reference.

*** In 2018 the annual average was used.

Source: National Statistics Institute (INE).

Pension evolution

Variation

power

purchasing

* Pensioners who earn less or more than 1,000 euros.

** November data, in%. Since 2012, when pensions cease to be linked to the CPI, the December figure is taken as a reference.

*** In 2018 the annual average was used.

Source: National Statistics Institute (INE).

Pension evolution

Power variation

purchasing

* Pensioners who earn less or more than 1,000 euros.

** November data, in%. Since 2012, when pensions cease to be linked to the CPI, the December figure is taken as a reference.

*** In 2018 the annual average was used.

Source: National Statistics Institute (INE).

Pensioners gain purchasing power for the first time since 2015



Both in 2016 as in 2017, the minimum rise of 0.25% was repeated, below inflation, but already in 2018, Rajoy agreed with the PNV to leave the new system parked and approved a rise of 1.6% and 3% for The minimum pensions. That year, December inflation stood at 1.2%, but the annual average, which was 1.7%, was taken as a reference, so pensioners were compensated with a paguilla of the remaining 0.1% in February of this year.

For the minimum retirement pension of 642.9 euros, it means a gain in purchasing power of 5.14 euros per month, about 72 euros per year if the 14 payments are taken into account. For a person who receives a maximum pension of 2,659.41 euros per month, it is as if he had earned 21.3 euros more per month, almost 300 euros more per year. If, as experts recommend, we stick to the annual average, the inflation figure for 2019 does not even reach 0.7%, so the purchase capacity gain would be greater.

Employees and officials

Not only do pensioners gain purchasing power in 2019. Also, and to a greater extent, most salaried workers and civil servants have done so. The economic recovery was slow to arrive for wages, but in 2019, after four years of growth, they finally experienced significant increases. “The salaries agreed in the agreement have grown by 2.3% at the end of November,” recalls Mari Cruz Vicente, secretary of Trade Union Action of CC OO, while those of the officials, thanks to the agreement reached in March 2018, they did 2.5% as of January. So they are, respectively, 1.5% and 1.8% more wealthy. Not to mention 22.3%, up to 900 euros, which raised the minimum interprofessional salary after the agreement between PSOE and Podemos at the end of 2018.

Vicente values ​​positively that wages “recover part of the purchasing power lost since the crisis.” “That was the objective of the IV Agreement for Employment and Collective Bargaining signed between unions and employers year and a half agoand for now the objective is covered, ”he recalls, warning that“ there is still a year left, so the salary policy must be the same ”in 2020. Gonzalo Pino, from UGT, also celebrated the rise. “It was time for policies that serve to recover wages” and advocated increases of around 3% for next year%.

By 2020, the Government intends for the SMI to rise again, although leaves the rate of rise in the hands of social agents. Yes you set a 0.9% pension revaluation, although this should wait until there is a government to be embodied in a decree law that keeps the 2013 reform suspended, as happened in 2018 and 2019. “The CPI will be in line with that rise”, anticipates María Jesús Fernández, remembering that Funcas forecast 1%. “The figure advanced by the Government is feasible, although it will always depend on energy prices: fuels and electricity, and these are unpredictable.”

What is still unclear is what formula will be used to revalue pensions from 2021. The idea of ​​the Government of Pedro Sánchez was use the annual inflation average to update them, but the definitive reform of the system imposed by Rajoy in 2013 remained in the air when the general budgets of the State did not go ahead. CC OO advocates a system similar to the one that existed until 2013, which takes the CPI as a reference and includes a guarantee clause that compensates for the increases above the expected. That clashes with the Social Security deficit, which accumulates a debt of more than 50.00 million.

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