Spain’s public pension system is among the most generous in our environment, but a debate is generated around it that is increasingly resonant, which is the pressure of aging and the erosion of purchasing power due to the rising cost of living. To this problem we must add the political uncertainty regarding the revaluation of pensions according to the CPI. In fact, according to the Unespa survey, it indicates that only 13% of the population believes that the public pension will be enough to maintain the standard of living after retirement. In this sense, the latest report from DataPulse Research shows that Spain is among the only four countries in the European Union where the average public pension, before taxes, covers the estimated average annual expenditure of a retired person, with a margin in favor of 3%.
The study figures indicate that the average retirement pension in Spain before taxes is 19,844 euros per year (that is, gross income). Compared to this monthly income, the average expense of a person over 65 years of age reaches 19,349 euros. This positive balance is rare in a European Union where the average public income is 17,321 euros.
The consulting firm’s analysis confirms that only three nations besides Spain achieve a surplus in their retirees’ accounts. Romania tops the continental table with a 21% margin in favor of the pensioner. The Czech Republic follows very closely with 18% and Poland with 4%.
If we look at the Eurostat data collected in the study of DataPulse Researchthey tell us that around 20% of European citizens are already over retirement age. In the case of Spanish households, housing and basic supplies absorb 38% of the total outlay. Food is the second most expensive item with 18% of expenses. Transportation requires 8% and leisure 5%.
A factor to take into account to cushion the economic impact lies in the real estate model of housing in Spain. 80% of older Spaniards live in a home they own. The remaining 20% suffer a very high exposure to the continued strong increase in the rental market.
Spanish retirees above average at risk of poverty
The risk of poverty among Spanish retirees slightly exceeds the European average since the analysis indicates that economic vulnerability hits very specific and unprotected population groups especially hard. Women, people without property, and households with lower incomes face serious daily difficulties. The generalized positive margin does not under any circumstances ensure the well-being of all social profiles in an era marked by the general increase in the cost of life.
The document confirms that in 24 of the 30 countries analyzed the retirement pension is insufficient to live on. Nominal comparisons show a huge continental gap. Luxembourg leads the ranking with pensions above 34,000 euros, a figure that radically contrasts with the situation in Serbia, where benefits fall below 4,300 euros.
This huge difference is slightly smoothed out when applying the real-life cost in each territory. France and Spain share an average pension of close to 20,000 euros, but purchasing power varies significantly depending on the prices in the country of residence.
The great European economic powers show structural weaknesses at the base of their welfare systems. In Germany, France and Italy the cost of living in retirement ranges between 24,000 and 29,000 euros per year. This very high level of spending completely dilutes state income and forces citizens to resort to private savings plans. The document identifies a minority group with deficits of less than 10% made up of Bulgaria and Denmark.
The greatest financial abyss is recorded at the ends of the continent. Croatia, Slovenia, Hungary and Norway suffer from deficits of around 40% compared to the real needs of the elderly. In these territories, retirees must finance more than a third of their usual standard of living through other means to avoid falling into social exclusion.