Pension

Demonstrators want pensions to remain indexed to inflation and the gender pension gap to be eliminated.

Approximately 25,000 people have gathered in the Spanish capital in support of the state pension scheme, as protests continue across Europe, prompted by a range of issues, including the cost of living, school conditions and alleged corruption.

Protesters from across the country marched through Madrid on Saturday before next month’s general election.

The pressure on Spain’s state pension scheme is being driven by several factors, including an ageing population, a low birth rate and wage stagnation, as well as a declining ratio of workers to pensioners.

Demonstrators are concerned that the state pension scheme could be significantly weakened depending on who wins next month’s election. The country’s monthly pension bill hit a record high this year of almost 14.5 billion euros ($16.2bn).

Protesters marched from Atocha train station to the Gran Via, Madrid’s busiest and most famous street.

Several of the demonstrators carried banners reading “protect and guarantee our pensions”.

Emilio Delgado serves as the deputy spokesperson of the left-wing party Mas Madrid in the Assembly of Madrid. Posting on X, he said that “no pension should be below the minimum wage. A lifetime of work deserves a dignified retirement.”

Protesters want pensions to remain indexed to inflation and are calling for the gender pension gap to be eliminated.

Prime Minister Pedro Sanchez has accused the right-wing Popular Party (PP) of planning to weaken inflation-linked pension increases if it wins next month’s election.

However, leader Alberto Nunez Feijoo said on Monday that he would continue to raise pensions in line with inflation if his party wins the vote.

Sanchez has pledged to protect pensions if he remains in office and says the current pension system is affordable.

The system has gradually become more reliant on state funding because of a growing number of pensioners and increases in monthly payments.

But there are two issues to consider.

Firstly, this is about political choices, and the UK chooses to dedicate larger amounts to items such as universal healthcare.

And secondly, with ageing populations, the OECD reckons the amount needed for pensions may be set to soar in many nations by 2060 (the exceptions largely being those that are deploying changes).

Its predictions for the UK are likely to rise by less under the revised triple lock system being put in place by Andy Burnham but it may still mean more borrowing.

As it is, £1 in every £13 the UK government spends is to pay the interest on existing debt. And countries with more generous pensions, such as Italy, have faced pressure to reform.

So in many ways, with auto-enrolment into workplace pensions, the UK appears to be ahead of the game in insisting on universal privately funded pensions for workers. But that system raises another issue: the gender pension gap.

The gender pension gap is the difference between the average pension income of men and women aged 65 and over, as a percentage of men’s average pension income.

It found that the typical gap in most wealthy countries is around 22.8% in favour of men.