The government has reneged on its campaign pledge to compensate pensioners for a loss of spending power due to inflation, opting instead to concentrate on meeting the deficit-reduction target for this year.
The CPI in October stood at 2.9% while the official target for the full year was 1%. That would have meant the government finding an additional €3.8 billion to offset the loss of spending power for pensioners.
The Secretary of State for the budget, Marta Fernández Currás, said pensions would be raised by 1% next year and 2% in the case of those who received a monthly payment of €1,000 or less. The latter group accounts for 6.6 million pensioners, 70% percent of the total.
Pensioners had already suffered a ‘freeze’ under the previous socialist government. Earlier in the month, the Secretary of State said that there was room to compensate pensioners for the loss of purchasing power. However, the government decided not to do this.
So, with a pensions freeze under the socialists and a failure to top up pensions under the PP, someone on the average pension of €835 a month will see their purchasing power cut by €105 per annum.