The lowest pensions are expected to increase by 2.79% in 2026, but the Government admits going further. During the parliamentary hearing on the State Budget for 2026 (OE2026), the Minister of Labor, Solidarity and Social Security, Maria do Rosário Palma Ramalho, confirmed that the attribution of a “new extraordinary supplement to pensioners” is being studied next year.
According to the government official, “pensions up to twice the Social Support Index (IAS) should increase by 2.79%, that is, 0.5 points above 2025 inflation”, which will allow “a recovery in purchasing power for around 90% of pensioners”.
However, the minister added that, if there is budgetary slack, the Executive intends to move forward with additional support, similar to what was granted in previous years, with the aim of mitigating the impact of inflation and reinforcing the disposable income of retirees with lower pensions.
How the increase will be calculated
The update of pensions in 2026 follows the legal mechanism in force, which takes into account two variables: the average real GDP growth of the last two years and the average variation in the Consumer Price Index (CPI), excluding housing.
Based on preliminary data, the 2.79% increase applies to pensions up to around one thousand euros per month. The official calculation will be confirmed at the beginning of next year, after the publication of the definitive indicators by the National Statistics Institute (INE).
According to the newspaper Público, the final value of the increase should be slightly above inflation, but still below the increases recorded in 2023 and 2024.
The role of the State Budget
During the budget debate, the president of the Public Finance Council (CFP), Nazaré da Costa Cabral, highlighted that measures such as the extraordinary supplement have a redistributive nature and should be financed by the State Budget, and not by Social Security.
“The sustainability of the social security system depends on a clear separation between social protection expenses and budgetary support measures”, explained the economist, arguing that solidarity policies, such as temporary supplements, should be supported by taxes and not by workers’ contributions.
Political reactions
The proposal comes in a context of intense political debate on the future of pensions. The Socialist Party suggested using the Social Security surplus to reinforce lower pensions, while Chega presented a proposal for a permanent increase of 1.5%, appealing to consensus between parties.
The Government maintains the line of budgetary prudence, guaranteeing the increase foreseen by law and leaving open the possibility of an additional supplement, if the State’s accounts allow it.
Legal increase in pensions
The confirms the legal increase of 2.79% in pensions up to twice the IAS and admits creating a new extraordinary supplement in 2026 for pensioners. The measure will depend on the evolution of public accounts, but could mean an additional reinforcement for thousands of retirees with lower incomes.
The announcement left an expectation in the air: in 2026, the increase in pensions may not be limited to the automatic value provided for by law.
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