Social Security has almost a million pensioners on its payroll who receive a benefit of more than 2,500 euros per month. A figure that far exceeds the average salary in the country, which was around 2,130 per month last year, according to the INE. In addition, of this entire population, there are 450,000 people who receive a benefit greater than 3,000 euros per month, a threshold that had not been surpassed until 2023, when the maximum pension stood at 3,058 euros by increasing the maximum contribution base.. This is clear from the latest contributory pension statistics published this Tuesday by the department led by Minister Elma Saiz.

Although the number of pensioners who receive a benefit of more than 3,000 euros per month is relatively small—they barely represent 7% of all pensioners for whom data exists by income bracket—the expenses for the system are considerable.. This population group represents a cost of more than 1,363 million euros per month for Social Security accounts.

In any case, it is important to remember that those who receive this high pension have contributed more during their working career, which gives them the right to a higher initial benefit when they retire.. However, these people obtain a greater benefit from the revaluation of pensions according to the CPI – which applies to all Spaniards equally – than the lowest incomes in absolute terms.

Gender issue

Among the retired population there are 373,527 people who receive the maximum pension. However, of them, 80% are men, an overwhelming difference that is mostly explained by the later incorporation of women into the labor market.. The average age of pensioners is 73 years, a generation that entered the labor market between the late sixties and early seventies, when making one's way in a man's world was more difficult.

The other side of female precariousness is on the opposite side of the income spectrum. Among retirees who receive a benefit equal to or less than the minimum wage, two out of every three cases are women. So much so, that the current average retirement pension for a woman is 1,080 euros per month, the same amount as the interprofessional minimum wage in force in 2023.

The daily reality of the pension system is much more similar to this last case. In Spain there are almost 4 million retirees whose pension is equal to or less than the minimum interprofessional wage. A group, made up mostly of women and which represents around 40% of the population that receives contributory pensions in Spain.

The latest data released by Social Security reflect that the average pension stood at 1,198 euros per month in November 2023, an amount that in the case of retirements rises to 1,378 euros per month.. Retirees who enter the system with an initial average pension of around 1,512 euros per month.

From the point of view of spending, the monthly disbursement of contributory pensions reaches 12.1 billion, 11.5% of the National Gross Domestic Product. In the case of November – when one of the two annual extra payments is paid – the bill grows to 24,000 million, as an additional 11,823 million of the extra are incorporated. The bulk of the pension payroll is covered thanks to the social contributions paid by workers affiliated with Social Security, but these are not enough to cover all the expenses, so the State has to complete what is missing through resources from taxes.

In total, in Spain there are 10,101,961 contributory pensions registered in the system, the vast majority of them retirement, which represent 63% of all pensioners, although they account for almost three out of every four euros of expenditure.

3.6% increase by 2024

The increase in pensions for 2024 will be known next Wednesday, when the INE will make public the inflation data corresponding to November. The revaluation of pensions is calculated by averaging the interannual CPI between October of the previous year and the reference November. Unless the data for the current month is known, the average for the last eleven months is 3.6% and will hardly exceed 3.7%.

With these figures in hand, the average pension would rise by about 50 euros per month in 2024. From the point of view of spending, the cost of shielding purchasing power would be around 6.5 billion if the criteria of the Bank of Spain are applied, which estimate that for each point of inflation spending increases by 1.8 billion.

There will be more information…

The mortgage firm deepens its collapse. According to data released this Tuesday by the National Institute of Statistics (INE), the number of mortgage loans signed for the purchase of homes fell by almost 30% in September compared to the same period in 2022, which represents not only the eighth drop consecutive, but also the deepest of the downward streak that the mortgage market has been going through since the beginning of the year. While the granting of financing for home purchases cools, interest rates continue to grow slowly, reaching their highest levels since February 2016.

In the ninth month of 2023, a total of 31,054 mortgages were signed, a figure 29.6% lower than that registered a year before. The decrease exceeds those recorded in previous months. Specifically, in August the signing of mortgage loans had already decreased by 22.7% compared to the previous year and previously in May the drop was around 24%. You have to go back to January 2021 to find a more pronounced collapse in the mortgage firm than that recorded in the last month. “The cooling in the sector is increasingly accentuated as we approach the end of the year,” confirms Ferran Font, director of studies at the real estate portal piso.com.

“Mortgages continue to fall due to the loss of confidence in the housing market,” assesses the General Council of the Colleges of Real Estate Agents (COAPI), which points out that the September figures are “a clear reflection of the moment that we live in and the drop in demand for home purchases due to the rising cost of living and mortgage financing, as well as the global uncertainty scenario.”. “The turbulent political context generated around the inauguration of Pedro Sánchez and the legal uncertainty generated by the Housing Law have caused a lot of distrust,” they say.

Despite the decrease in year-on-year terms, the total volume of mortgages signed in the last month of September is the fourth highest in the last decade for a ninth month of the year. “We must remember that 2022 was an exceptional year for the real estate and mortgage market and now we are in a stabilization phase,” says Laura Martinez, spokesperson for the mortgage comparator iAhorro, positively.. “Despite this, more than 30,000 mortgages are being signed per month, so we cannot talk about a crisis, but about the balance of the different market values that are little by little adjusting in a context of high rates and mortgage prices. housing that does not finish going down,” he adds.

In monthly terms, compared to August, the mortgage firm grew by 9.6% in September, since in the eighth month only 28,344 loans were subscribed. The expansion of the real estate market in September is common after the decline in activity during the summer. However, the monthly increase recorded this year is the smallest for a month of September since 2012.

At the same time that the mortgage signing was reduced in September, the volume of loaned capital also sank 29.7% compared to the previous year to 4,446.5 million euros. The total amount of money lent by financial institutions for the purchase of housing has now accumulated negative results for six consecutive months, with falls of more than 20%. “The sector is suffering a new drop of 30% in loans granted, although it is not reflected in prices,” Font confirms.

Specifically, the average amount of mortgages signed in September fell slightly by 0.1% year-on-year in the ninth month of the year, to 143,186 euros. The spokesperson for iAhorro points out that the stagnation of the average amount of mortgages is one of the indicators that slows down the market the most. “This is because housing prices are stagnant: although they fall in some areas with less demand, in large cities like Madrid or Barcelona prices continue to rise due to the low supply there is,” explains Martínez.

Rising interest rates

However, despite the collapse of firms, interest rates remain rising. In September, the average rate at the beginning of the loan grew to 3.26% – the highest figure since February 2016 – at an average term of 24 years. A year ago, in September 2022, it did not exceed 2%. Although the upward trend continues, the advance of the average rate has slowed in recent months. In fact, in September it barely increased one hundredth compared to the 3.25% in August, as had previously happened in July.. The increases recorded at the beginning of the year were much larger. For example, only between January and February the average rate grew by just over two tenths.

In this way, the escalation in the increase in the cost of financing has slowed down, after the rate increases undertaken by the European Central Bank (ECB) began to see their end in the middle of the year.. “One of the best news is that the rate of rise in mortgage rates is reducing and that we may be close to its ceiling,” confirms the head of Economic and Financial Analysis at Ibercaja, Santiago Martínez. “That a ceiling is reached on interest rates and there is a little more visibility, since it seems difficult for the European Central Bank to further tighten monetary policy in a context of weakness in growth and moderation of inflationary tensions, is the first step towards stabilizing the mortgage market,” he adds.

The ECB finally decided to take its foot off the accelerator in October, after ten consecutive increases and leaving rates at an unprecedented level of over 4%.. Despite the fact that inflation is increasingly approaching the 2% objective set by the monetary authority, the institution chaired by Christine Lagarde does not expect to lower rates in the short term. “It is not something that we will see in the coming quarters,” stressed the former director of the IMF in a recent interview.. For its part, the Euribor – the main reference in Spain for calculating the payment of most variable mortgages – is stuck above 4%.. The indicator closed September at an average of 4.15% and in October it barely rose to 4.16%.

In any case, the rise in rates registered in September was fundamentally due to the increase in the cost of financing at a variable rate, which rose from 2.89% in August to 3.09%.. On the other hand, on fixed mortgages the average rate was reduced from 3.54% to 3.4%. Although the latter continue to maintain higher average rates and are gradually losing ground compared to their classic alternative, fixed rate loans continue to be the preferred option among the majority of new mortgage holders.. Specifically, 56.2% of the loans granted for the purchase of a home in September were at a fixed rate and the remaining 43.8% at a variable rate.

From Portugal to Germany, passing through Spain and France. The H2Med green hydrogen corridor has taken another step this Tuesday to become a reality with the decision of the European Commission to include it in its new list of Projects of Common Interest (PCI), thus ensuring that they will have European financing, in part of a fund for energy connections endowed with 42.3 billion euros. Brussels has also included the internal route of the H2Med in Spain, but excluding a section between Guitiriz (Lugo) and Zamora.

As planned, the Commission has formally adopted a new list of PCIs which, in the case of Spain, also includes four electrical connections, with Portugal and France, as well as electrolyser projects, to produce renewable hydrogen, and pumping hydraulic, to store electricity of hydraulic origin.

In the case of H2Med, the decision makes it eligible to be financed with European funds.. There are several financial instruments for them. One of them is for connection facilities (Connecting Europe Facility) endowed with 42.3 billion euros until 2027 to support energy infrastructure networks throughout the EU.. Almost a year ago, when the H2Med was formally presented at the Euromed in Alicante, the President of the Government, Pedro Sánchez, estimated the cost at 2.5 billion, of which he hoped that half would be covered by community funds.. To this amount must be added the subsequent addition of the section to Germany and the expansion of the internal configuration in Spain. Enagás estimates that the projects of the Spanish Hydrogen Backbone Network, together with the storage, would represent an investment of around 4.6 billion.

While waiting to determine its contribution, the European Commission considered this Tuesday that practically the entire H2Med route decided so far, which runs from Portugal to Germany, should be considered a Project of Common Interest.

This includes the internal infrastructure of Portugal, Spain and France, as well as the international interconnectors between Portugal and Spain (between Celorico and Zamora) and between Spain and France, through the so-called BarMar, the underground connector that will link Barcelona and Marseille.. Also the connection between France and Germany, an infrastructure called HyFen, as well as the internal German infrastructure to connect with France, a project called H2Hercules South.

Electrical interconnections and pumping

In addition to this green hydrogen transportation megaproject, the new CPI list includes seven other projects located in Spain, including four electrical interconnections with Portugal and France. They will link Fontefria with Vila Nova de Famalicao in Portugal and Gatica and the French town of Cubnezais, along the Bay of Biscay. Two others will be laid across the Pyrenees to link with France, one from Aragon to Marsillon and another from Navarra to the Landes.

Five Spanish electrolyzer projects will also receive European funding, the key device for the production of green hydrogen, which separates the two hydrogen atoms in each water molecule for each one of ozone (H2O).. The green label is because the electricity used to make this separation comes from renewable sources, such as wind energy or photovoltaics.. A network of hydrogen electrolyzers in Tarragona, a large-scale electrolyzer in Bilbao and another in Cartagena, the Green Hydrogen Valley in Andalusia and another in Asturias are already included in the PCI list.

Two hydrogen storage projects planned by the internal H2Med project, in Cantabria and the Basque Country, are also on the list and will be financed with part of European funds, as well as three other electric pumping infrastructures, the renewable alternative to store hydroelectric energy. , in Navaleo (León), in Los Guajares (Granada) and Aguayo (Cantabria).

Half a billion to boost electrical networks

In total, the Commission has included eight Spanish projects in the new PCI list, made up of 68 trans-European energy infrastructures, which compared to the last biannual update at the end of 2021, for 2022-2024, which this latest version succeeds, has undergone changes, after Brussels decided not to continue financing energy projects that prolong the use of fossil fuels. Among them the MidCat, which was succeeded by the H2Med to channel renewable – or 'clean' – hydrogen, also including that of nuclear origin, instead of gas.

A sign of the new times and the new energy and emissions reduction objectives, this year's list also includes green ammonia projects in other countries and others are beginning to appear to which the Commission will attach great importance in the coming years to respond to a need shared by countries and companies throughout the EU, to expand, digitalize and modernize electricity networks.

This same Tuesday, it approved an Action Plan to accelerate the deployment of networks, so that they can support the increase in electricity that for years has been generated by the expansion of renewable energies in the EU, from photovoltaics to offshore wind, including electric cars.

According to Brussels, 40% of the electricity distribution networks in the EU are more than 40 years old and cross-border transmission capacity has to double by 2030. For this, it offers 584,000 million euros to finance the necessary investments, which, for example in Spain, are estimated at more than 5,700 million for transportation and more than 22,000 for distribution.

To this end, the Commission encourages companies and countries to identify specific actions to focus investments and indicates as one of the ways the presentation of projects to be included in upcoming lists of Projects of Common Interest.. Other measures are to create a fast track to authorize them, in the style of renewable parks, or to provide regulatory incentives.