The European Commission’s Aging Report, published on Friday, has revealed that Spain will need to allocate a higher percentage of its GDP to public pensions in the coming years. This change is mainly due to measures introduced by former minister Jose Luis Escriv, including annual pension revaluations based on inflation.

These increases in spending are expected to have a significant impact on Social Security accounts. Despite the planned increase in income, the system is still expected to face a budget deficit, which will worsen over time. To address this, the reform includes provisions for automatic adjustments based on evaluations by the Independent Authority for Fiscal Responsibility (AIReF).

The reform aimed to maintain the purchasing power of pensioners and ensure that pensions would not lose value in the future. However, other initiatives, such as increases in contributions and changes in pension calculations, are designed to generate more income for the system. The overall goal is to maintain the sustainability of the pension system by balancing income and expenses.

While these measures will result in more spending on pensions, they are intended to ensure that pensioners receive adequate benefits while also maintaining financial stability for future generations. AIReF will play a key role in monitoring these changes and providing recommendations to the government if further adjustments are required.