In a recent announcement made during the Festa Magna, Andorra's head of government, Xavier Espot, revealed plans for a pension update set for 2027. This initiative is designed to strengthen the purchasing power of pensioners.
Pensions that are at or below the minimum interprofessional salary (SMI) will see an increase of double the consumer price index (CPI), while those exceeding the SMI will be adjusted in line with the CPI.
The announcement has been met with approval from the elderly community, who argue that raising the lowest pensions is manageable for the system. Fèlix Zapatero, president of the Federation of Senior Citizens' Associations, stated, "If the minimum wage increases, contributions to the CASS (Andorra's social security system) also rise. This effectively boosts all salaries, which is beneficial as it increases consumption and facilitates access to housing."
This doubling of the CPI for pensions below the minimum wage has been implemented in previous years. Zapatero explained that the federation had proposed a differentiated pension adjustment system based on monthly income. The proposal included a double CPI increase for pensions below the minimum wage, a CPI increase for those between one and two times the threshold, a half CPI increase for pensions between two and three times the SMI, and no increase for pensions above three times the SMI.
However, Espot did not clarify whether the CPI increase for pensions above the SMI would be tiered. In July, the government raised the minimum wage by 2.8%, based on the CPI accumulated from the start of the year until May, increasing the SMI from €1,525.33 to €1,568.67. The preliminary CPI figure for September stood at 4.5%, although this number may fluctuate until the end of the year.
