The updating of pensions will be carried out in a staggered manner, with different percentages depending on the value of the pension, following the legal annual update mechanism. Pension increases in 2026 could reach 127 euros per month, but only for a restricted group of beneficiaries.
According to statements by the Minister of Labor, Maria do Rosário Palma Ramalho, in Parliament, the lowest pensions will increase by 2.79%, while the average pensions will be updated by 2.29% and the highest by just 2.04%. The calculation formula is based on average annual inflation and GDP growth, as provided for in Law no. 53-B/2006.
The lowest pensions rise above inflation
According to the minister, pensions up to two IAS, that is, up to 1,045 euros per month, will increase by 2.79%: around half a percentage point above expected inflation. This increase, he explained, covers 90% of Portuguese pensioners.
With the IAS set at 522.50 euros, a minimum pension will rise to 537 euros, while a pension of 1,045 euros rises to 1,074.15 euros.
Average pensions maintain purchasing power
For pensions between 1,045 and 3,135 euros, the increase will be 2.29%, which corresponds to a “neutral” update, that is, in line with inflation. A retiree with a pension of 3,135 euros will receive 3,206.79 euros from January 2026.
Higher reforms increase less
Pensions between 3,135 and 6,270 euros will increase by just 2.04%, slightly below inflation: a loss of purchasing power that, according to the government official, will only affect around 1% of total pensions in Portugal.
For a pension of 6,000 euros, the increase is equivalent to 122.40 euros per month, bringing the value to 6,122.40 euros. Above 6,270 euros, increases are limited to 127 euros per month.
Updating pensions will cost the State almost one billion
According to the minister, the budgetary impact of the planned increases amounts to 940 million euros: 640 million relating to Social Security pensions and 300 million to Caixa Geral de Aposentações.
Asked about the possibility of transforming extraordinary increases into permanent ones, Palma Ramalho dismissed this hypothesis, arguing that the Government must follow the legal formula. “We must protect all pensions, current and future, without compromising the sustainability of public accounts”, he stated, cited by .
What to expect in 2026
With this update, the vast majority of pensioners will see their pension grow slightly above inflation, guaranteeing a modest but real improvement in monthly income. Higher pensions will have a limited increase, reflecting the principle of greater protection for lower incomes.
The objective of the pension increase in 2026, highlights the Government, is to balance social justice with the sustainability of the system, ensuring that all retirees benefit, albeit in a different way, from the economic recovery.
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