Pensions 2026: Official Income Increases for Expats

The Spanish government has officially finalized the pension revaluation for 2026, marking a significant income boost for over 13 million people, including the vast expat community. As of January 13, 2026, the specific rates for both Spanish contributory pensions and the UK State Pension "exported" to Spain have been confirmed, providing much-needed clarity for retirees managing their household budgets.

Spanish Pensions: The 2.7% CPI Revaluation

Following the structural reform linked to the Consumer Price Index (CPI), Spain has implemented an automatic increase for all contributory pensions to ensure beneficiaries do not lose purchasing power against inflation.

• Standard Increase: Most contributory pensions have risen by 2.7% as of January 2026. For an average retiree, this equates to roughly €572 more per year, paid over the standard 14 installments.
• Minimum Pensions: In a move to protect lower-income groups, minimum pensions for those over 65 (with a spouse) have seen a higher boost of roughly 7%, increasing from approximately €1,127 to €1,255 per month.
• Non-Contributory Benefits: These have received the largest adjustment of 11.4%, specifically targeting those on the lowest income tiers.

UK State Pension: The 2026 Triple Lock Impact

British retirees living in Spain are among the "big winners" this year due to the UK's Triple Lock mechanism. Because the UK state pension is legally uprated for residents in the EEA/Spain, these increases apply fully to your monthly income.

• The 4.8% Boost: Starting in April 2026, the full new State Pension will rise by 4.8% (based on UK wage growth), increasing from £230.25 to £241.30 per week.
• Annual Gain: For most couples receiving two full state pensions, this represents an annual increase of over £1,150 (€1,340) in total household income.
• NI Top-up Warning: Be aware that as of the 2026/27 tax year, the UK government has tightened rules on voluntary National Insurance contributions (NICs). Expats must now have lived in the UK for at least ten years to buy "cheap" Class 2 top-ups to boost their future pension.

Residency and the 2026 IPREM Threshold

For many expats, these pension increases are critical for maintaining residency status. The Spanish government uses the IPREM (Indicador Público de Renta de Efectos Múltiples) to set the minimum income required for Non-Lucrative Visas (NLV) and residency renewals.

• Minimum Income (NLV): For 2026, a single applicant typically needs 400% of the IPREM. With the 2026 adjustment, this threshold is approximately €28,800 annually (roughly €2,400 per month).
• Family Members: Each additional family member requires an extra 100% of the IPREM (approximately €7,200 per year).
• Safety Net: The 2026 pension hikes help ensure that retirees whose income was "on the edge" of the requirements remain safely above the threshold for their residency renewals.

Healthcare and Tax Considerations

While the extra income is positive, it is important to note that higher pension payments may impact your Spanish tax return (Modelo 100). If your total worldwide income exceeds the Spanish filing threshold, you must declare these increases to the Hacienda. However, these pension updates do not affect your public healthcare entitlement if you are already registered via an S1 form or through the Spanish Social Security system.

Expert Tip: Always ensure your bank in Spain is aware of your "Non-Resident" or "Resident" status for tax purposes to avoid unnecessary withholdings on your pension payments.