Pensioners shielded but others left out in the cold

Pensioners shielded from inflation others left out in the cold.

The cost of inflation in Spain has risen dramatically in 2021. The latest figures for the Consumer Price Index (CPI) published by the National Statistics Institute (INE) came out on Monday, November 29. According to these figures in November, the cost of common consumer goods is 5.6 per cent more expensive than last November.

Unless inflation driving factors change soon it is expected that 2021 will see the average CPI increase for the year close at 3 per cent.

The increased cost of inflation is hitting many people hard but some more than others. Pensioners are said to be one of the groups most vulnerable to rising prices. The Spanish government though has protected pensioners when they restored the pension link to the CPI. This means that pensions will increase in line with the average year-on-year CPI increase.

Pensioners may have been shielded from inflation but other groups such as those on minimum wage, people on the minimum living income and civil servants have not been protected. For these groups, purchasing power has been decreased as inflation increases.

The government recently increased the minimum wage (SMI) in Spain. This increase was approved in October and saw the minimum wage rise from 950 to 965 euros per month in 14 payments. This means people on minimum wage gained a 1.6 per cent increase. If the year ends with a 3 per cent average increase in inflation this will have eaten up all the minimum wage increase and more.

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