On 1 January 2025, contributory pensions, including retirement, permanent disability and widow’s pensions, are revalued according to the average year-on-year change in the CPI for the 12 months prior to December 2024, i.e. according to the average year-on-year change in the CPI between December 2023 and November 2024.
This revaluation formula has been applied since 2022. Thus, contributory pensions were revalued by 3.8% in 2024, which was the average year-on-year change in the CPI between December 2022 and November 2023. In 2023, contributory pensions increased by 8.5%, corresponding to the average year-on-year CPI between December 2021 and November 2022.
When will the increase in pensions for 2025 be announced?
The percentage by which pensions will increase in 2025 will be known provisionally at the end of November, around 29 November. The National Institute of Statistics (INE) will publish the preliminary data of the November CPI (IPCA) at the end of November, which will allow an approximate calculation of the increase in pensions to be made.
The final percentage of the November CPI (the so-called harmonised CPI) and, therefore, that of the revaluation of pensions for 2025 will be known in mid-December.
Estimated increase in pensions by 2025
The preliminary CPI figure for August 2024 was 2.2%. According to Funcas’ forecast up to December 2024, made in July based on the CPI data for June, the average inflation rate expected for 2024 would be 3.2%, with an interannual rate in December of 3.5%. Therefore, if this estimate is met, contributory pensions could be revalued by 3.5% in 2025.
The maximum retirement pension will rise in 2025 more than the CPI
On January 1, 2025, a new measure will begin to apply, introduced within the 2nd package of pension reform measures (RDL 2/2023), consisting of increasing the maximum pension of the Social Security System above the CPI.
In 2025, the maximum pension will be revalued by the CPI plus an additional 0.115 percentage points. This annual increase of CPI plus 0.115% will be maintained every year between 2025 and 2050.
That is, if the above-mentioned estimate of the interannual CPI rate were met, the maximum pension would increase by 3.615% (3.5% interannual CPI + 0.115%).
Increase in minimum pensions, non-contributory pensions and minimum living income in 2025
Minimum retirement and widow’s pensions, non-contributory pensions and the gender gap supplement will continue to rise in 2025 by more than the year-on-year CPI appreciation between December 2023 and November 2024:
- In the case of minimum retirement pensions, progressively equate them with 100% of the poverty threshold, so that they converge with it from 2027. On January 1, 2025, the amount of the contributory retirement pension for a holder over 65 years of age with a dependent spouse will increase, in addition to the CPI, by the percentage necessary to reduce by 30% the gap that exists with the poverty threshold calculated for a household made up of two adults.
- In the case of minimum widow’s pensions, they will be increased to gradually align, after a period of 4 years (the period that began in 2024 and will end in 2027), with retirement pensions.
- Non-contributory retirement and disability pensions and the Minimum Living Income (IMV) are being progressively increased (between 2024 and 2027) until they converge in 2027 with 75% of the poverty threshold calculated for a single-person household. In total, the increase during those 4 years (not counting the CPI revaluation) will be 22%.
Increase of the gender gap supplement in 2025
The gender gap supplement will rise by another 10% in 2025 (the same as in January 2024), in addition to its annual revaluation according to the CPI.
