The Government of Spain has carried out the revaluation of pensions for 2026 with a general increase of 2.7%, although for the minimum and non-contributory pensions the increase will be greater and around 7% and 11.4%. However, this increase does not always translate into the same net increase for the pensioner. The reason is not in a hidden “reduction” of the pension but in the personal income tax, since the higher the annual pension, the greater the withholdings to be applied, since we remember article 17 of Law 35/2006 on Personal Income Tax considers it as income from work. And what is advertised gross is not always charged net.
The figure that has ignited the debate, 43%, comes from examples attributed to the Registry of Tax Advisory Economists (REAF) and reproduced by various media. It is important to clarify that it is not a general rate for all pensioners nor a uniform percentage for all “low” pensions, but rather a possible result in certain profiles in which the increase in income pushes the quota to a higher level. Even so, the data illustrates that the increase exists, but a part returns to the public coffers through fiscal means.
The increase exists, but the effect on the pocket is the same
The increase of 2.7% appears set in the norm published in the BOE (Royal Decree-Law 3/2026), which also updates the maximum pension for 2026. This revaluation is applied to the recognized amount, but the real impact depends on what happens with the tax. If the annual pension grows, the base on which personal income tax is calculated also grows and, with a progressive tax, the effective bracket may change.
This is where the confusion lies. The personal income tax does not “remove” the pension increase. What it does is tax an income that is now higher. Hence, two pensioners with the same percentage of revaluation may notice different net increases, that is, it is not only important how much is earned, but also the family situation, personal minimums, the autonomous community and whether there are other incomes in addition to the pension.
In which cases the State keeps 43% of the improvement
This is due to a technical effect, since in these income ranges (between 15,000 and 22,000 euros), when the pension increases, the retiree loses part of the “reduction due to work income”, which artificially increases what they pay for each new euro earned.
The following table shows what this would be like for a 66-year-old pensioner with annual pensions that, according to the material itself, are among the lowest that are already taxed by personal income tax. The table compares pension and personal income tax quota in 2025 and 2026, with the 2.7% revaluation, and calculates how much of the increase is absorbed via tax.
| Pension 2025 | Pension 2026 (2.7%) | Personal income tax 2025 | Personal income tax 2026 | Pension increase | Personal income tax increase | % of the increase that goes to the Treasury | Estimated net increase |
|---|---|---|---|---|---|---|---|
| €16,320.53 | €16,761.18 | €191.15 | €380.63 | €440.65 | €189.48 | €0.43 | €251.17 |
| €18,504.03 | €19,003.61 | €1,130.04 | €1,344.87 | €499.61 | €214.83 | €0.43 | €284.78 |
| €20,560.00 | €21,115.12 | €2,014.12 | €2,252.82 | €555.12 | €238.70 | €0.43 | €316.42 |
| €22,616.00 | €23,226.63 | €3,077.30 | €3,260.49 | €610.63 | €183.19 | €0.30 | €427.44 |
| €24,672.00 | €25,338.14 | €3,694.10 | €3,893.94 | €666.14 | €199.84 | €0.30 | €466.30 |
| €26,728.00 | €27,449.66 | €4,310.90 | €4,527.40 | €721.66 | €216.50 | €0.30 | €505.16 |
In the first three cases, the pattern is repeated, since from an increase of between 440 and 555 euros per year, the increase in personal income tax is around 189 to 239 euros. That is, around 43% of the increase. From a higher pension step, the percentage attributed to the Treasury drops to 30% in the table itself, so that the annual net increase clearly increases.
However, the examples do not detail all the tax assumptions that would explain exactly why the jump is 43% in some incomes and 30% in others. That is why it is advisable to avoid an automatic conclusion that the correct message is not that “The Treasury keeps 43% of the increase in the lowest pensions”, but that in some sections and profiles that may be the proportion of the increase absorbed by the tax.
In fact, if we look at the AEAT for 2026 (which can be consulted at this link ) quantities may vary. This table is for a simulation of a standard taxpayer (single, without disabilities, under 75 years of age but over 65) residing in a common regime community without additional regional deflation.
| Monthly Pension 2025 (x14) | Annual Gross 2025 | Gross Increase (2.7%) | Annual Gross 2026 | Personal Income Tax Marginal Section | Increase Tax (Approx.) | Real Net Increase | % Tax Absorption |
|---|---|---|---|---|---|---|---|
| €1,000 (Minimum) | €14,000 | +€980 (7%)* | €14,980 | 19% / 24% | ~€100** | ~€880 | ~10% |
| €1,500 (Average) | €21,000 | +€567 (2.7%) | €21,567 | 30% | ~€170 | ~€397 | 30% |
| €2,000 | €28,000 | +€756 (2.7%) | €28,756 | 30% | ~€227 | ~€529 | 30% |
| €2,500 | €35,000 | +€945 (2.7%) | €35,945 | 30% / 37% | ~€310 | ~€635 | 33% |
| €3,000 | €42,000 | +€1,134 (2.7%) | €43,134 | 37% | ~€420 | ~€714 | 37% |
| €3,284 (Max 25) | €45,976 | +€1,241 (2.7%) | €47,217 | 37% | ~€459 | ~€782 | 37% |
Why it happens: the difference between the “2.7%” announced and the net collected
The starting point is that the revaluation is calculated on the gross pension and personal income tax, on the other hand, is calculated on the annual income with a progressive structure. This means that each additional euro can be taxed at a marginal rate higher than the average rate that was already being paid. Hence the feeling that “half remains in taxes” in certain examples, but not because the system appropriates the increase by decree, but because the increase raises the base and part of that increase is taxed.
This nuance is essential to understand the debate without noise. The revaluation meets the formal objective of maintaining purchasing power against inflation, but the final result in the pocket is not homogeneous. The rise is charged; What changes is how much of that increase remains after taxes.
look at the net
The 2.7% revaluation is a real figure and is fixed. But the pensioner who wants to know what he “really” earns needs to go down to the net level and look at how much his annual pension increases and how much his personal income tax increases. In many cases the increase will be clear. In others, a relevant part of the increase will go to taxes, especially if the increase in income modifies the effective rate.