A majority of pensions will experience a 2.8% increase next year, based on calculations from data released on Friday by the National Statistics Institute (INE).
This rate is calculated using the November inflation data, confirmed today. This was the missing information needed to complete the pension update formula.
According to the statistics office, the average inflation over the last 12 months, excluding housing, was 2.27% in November. This allows for the automatic pension adjustment for the next year, using a formula that also considers the average annual GDP growth rate over the past two years. These data confirm the estimate released a week ago.
Based on these two indicators, pensions of up to two IAS (1,073.94 euros), which include most pensioners, will rise by 2.8% next year.
The Minister of Labor, Solidarity, and Social Security, Maria do Rosário Palma Ramalho, had already indicated that the lowest pensions should increase by 2.79% in 2026, an update that only considers the mechanism provided by law.
This mechanism stipulates that pensions are updated in January based on two indicators: the average growth of the Gross Domestic Product (GDP) over the last two years and the average variation over the previous 12 months of the Consumer Price Index (CPI) excluding housing as of November 30.
The minister had previously explained the increase
“Pensions up to twice the Social Support Index (IAS) should have an increase of 2.79%, which is 0.5 points above the 2025 inflation. This means a recovery of purchasing power for 90% of pensioners,” the minister explained during a parliamentary hearing on the proposed State Budget for 2026 (OE2026).
The minister also stated that the government will “increase pensions at the legal rate and, if there is budget leeway, we will also provide a new extraordinary supplement to pensioners,” as other government officials had previously indicated.
Beatriz Vasconcelos | 11:46 – 28/11/2025
CFP: Increase in the lowest pensions should be funded by the state budget
The potential increase in the lowest pensions is a redistributive measure that should be financed through the State Budget (OE), namely by the citizenship social protection system, said the chair of the Public Finance Council (CFP) on Thursday.
Questioned about proposals for increasing the lowest pensions during a parliamentary hearing on the State Budget for 2026 (OE2026), Nazaré da Costa Cabral noted that “the social security system must be protected per se.”
“It has its revenues and expenses, and the surplus of the system has a legally defined destination, which is the Social Security Financial Stabilization Fund (FEFSS), but increases in the lowest pensions are ‘a redistribution element.'”
[Updated at 11:11]
