What is the minimum retirement pension?

Following amendments to the budget, the minimum pension will increase by 3% in 2018

Pensions will be increased in 2018 by 3%, 2.75% more than the minimum of 0.25% annual guaranteed by law, regardless of the result given by the revaluation index of Spanish pensions, a formula that determines the corresponding annual increase.

Although the amount of the pension depends mostly on the amount paid in during an individual's working life, a minimum amount is guaranteed by law to those whose pension does not reach a certain level and who can also prove a lack of other income. This is known as "minimum complement" and also requires residence in Spain.

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Bear in mind that the retirement pension is calculated based on two variables:

1. Contribution bases of the last years (last 20 in 2018 and last 25 from 2022). The regulatory base is calculated on these, giving an average of the contribution bases.

2. Total period with contributions paid to the Social Security Institute: to be eligible for a contributory pension, at least 15 years of payments are required. With this period, 50% of the regulatory base is reached. 100% is achieved after having paid during at least 35 years and a half (from 2027, at least 37 years will be required). In cases in which you can opt for early retirement, the number of years retirement has been brought forward will also be taken into account to calculate the total value of the pension.

3. Some terms and conditions will be amended in the near future in accordance with Law 27/2011 of August 1. If now a period of 20 years is used to calculate the regulatory base, this period will be extended to 25 years in 2022. Regarding the number of years making contributions to the Social Security in order to achieve 100% of the regulatory base, this will increase from 35 years required at the moment to 37 in 2027.

The figures for each case: How long have I still got?

The minimum retirement pension has increased in all cases, and can be classified in three different categories: retirement at 65 years or more, retirement before 65 years and retirement at 65 years due to severe disability. Taking into account these situations and the aforementioned increase of 3%, a person of 65 years of age with a dependent spouse is eligible to receive €11,348.4 per year as minimum pension, whereas the figure is €9,196.6 if it is a person without spouse. If they have a spouse, but they are not dependent, the amount is €8,727.6.

The three situations are the same for when retirement has been taken before the age of 65 years. With a dependent spouse, the minimum pension is €10,638.6; €8,603 for people without a spouse, and €8,132.6 for those with spouse who is not dependent. The amounts increase when retirement takes place at 65 years due to severe disability. In this case, the minimum pension with a dependent spouse is €17,022.6, whereas the amount is €13.795,6 if there is not a spouse. When there is a non-dependent spouse, the minimum retirement pension is €13,091.4.

You can see all these details and amounts in the following table:

  With dependent spouse Without spouse With non-dependent spouse
 
65 years or more
With dependent spouse
€11,348.4
Without spouse
€9,196.6
With non-dependent spouse
€8,727.6
 
Under 65 years
With dependent spouse
€10,638.6
Without spouse
€8,603
With non-dependent spouse
€8,132.6
 
65 years - Severe Disability
With dependent spouse
€17,022.6
Without spouse
€13,795.6
With non-dependent spouse
€13,091.4

For a better understanding of these categories or situations, it is important to know the difference between dependent spouse and non-dependent spouse. To be considered dependent, the spouse must live with the pensioner and be financially dependent on him; this means not being the recipient of any type of pension from the State, or receive subsidies for minimum income guarantee or third-party support grants.

Likewise, joint income from the pensioner and the spouse must not exceed €8,301.10 per year. If any of these conditions is not met, the spouse will not be considered dependent and the amount of the minimum retirement pension would be reduced as it will belong to the other category. Without a dependent spouse, income from the pensioner will not exceed €7,116.18 in order to be eligible for "minimum complement".

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A pension plan: a great idea

Despite the improvement in the financial situation, demographic challenges point to a future with lower retirement pensions. For this reason, a pension plan has become an extremely useful product to complement the state retirement pension and enable you to enjoy a comfortable retirement.

BBVA offers you a wide range of options when taking out your pension plan, allowing any investor, whatever their profile, to find the most suitable choice for them. Go to bbva.es and see our catalog of pension plans and find the one which is most suitable for your needs. You will also be able to use our pension calculator to know what your pension will be depending on the plan you choose, and your investor profile and fiscal situation.

At BBVA, we will always keep you informed on any changes and updates, and we adapt our products to each situation in order to ensure you obtain the highest yield. Visit us at bbva.es as often as you can and discover how we can help you to enjoy a financially comfortable retirement.

Your pension at BBVA

We offer very good conditions when it comes to paying in your pension with our Va Contigo Account. But if what wish is bring it to BBVA from another company of easy way and fast, put at your disposal our Removals service (to the one which can access from bbva.es or from BBVA's app), which is responsible for carrying out the entire process conveniently, quickly and at no cost to you. Visit BBVA.es to find out more.
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