The Government of Spain raises pensions by 2.8% and extends public transport subsidies until June 2025

Moncloa Palace, Madrid

The President of the Government of Spain, Pedro Sánchez, attends the media during the press conference following the Council of Ministers (Pool Moncloa/Fernando Calvo y Pool UE)

The Council of Ministers has approved urgent economic, tax, transport and social security measures, and extended certain measures to address situations of social vulnerability.

During his appearance at Moncloa Palace to assess the political year, the President of the Government of Spain, Pedro Sánchez, highlighted the main agreements adopted today, which aim to improve the lives of citizens and protect their purchasing power, strengthen the welfare state and boost public services.

Revaluation of 12 million pensions and benefits in 2025

The Executive has approved the revaluation of pensions of the Social Security system, State Pensioners and other public benefits for 2025.

Pedro Sánchez announced that the increase, which will be effective from 1 January, means an increase in contributory pensions of 2.8% and will benefit more than 12 million citizens.

The president recalled that one of the Government's objectives is to protect the purchasing power of the elderly and workers, which is why the average retirement pension, which rose by 734 euros per year in 2024, will be increased again this year: "For this progressive coalition Government it is essential that the wealth generated by the economy reaches all citizens, those who work, those who have worked and those who are preparing to work.

The revaluation will mean an additional 600 euros per year for people with an average retirement pension.

The Council of Ministers also agreed to increase minimum pensions, which will rise by around 6%, while non-contributory pensions and the Minimum Basic Income will increase 9%.

On the other hand, the supplement for the reduction of the gender gap is revalued by 8.1% on the amount recognised in 2024 and reaches the amount of 35.9 euros per month per child.

Extension of public transport discounts for frequent travellers

The Government has extended the discounts of up to 100% on land public transport until 30 June 2025 for regular travellers.

Free season tickets for Cercanías, Rodalíes, Media Distancia Convencional and state bus lines will remain in force during the first half of 2025, as well as direct aid to autonomous communities and local authorities to promote the reduction of at least 50% of the price of season tickets and multi-journey tickets for urban and metropolitan public transport. In addition, for the first time, public bicycle rental systems are included in the public transport subsidies with a 50% discount on season tickets.

The president of the Government of Spain announced that public transport subsidies will continue with a wide range of discounts from June onwards. In this respect, a new scheme has been agreed and will enter into force on 1 July 2025.

The future system envisages the creation of a single Cercanías ticket for all areas and centres in Spain for 20 euros per month, free travel on all public transport for children under 15, discounts of between 50% and 70% on season tickets for young people, lower fares for regular users and new subsidies to promote the use of bicycles as a means of daily transport.

Pedro Sánchez pointed out that the use of public transport has increased 13% "thanks to improvements in the service, to the firm commitment to discounts and free travel for certain routes and segments of the population." Moreover, he pointed out that Spain is the second country in the world in terms of kilometres of high-speed rail, more than Germany and Italy combined.

Social shield measures

The President of the Government of Spain, Pedro Sánchez, during his appearance after the Council of Ministers | Pool Moncloa/Fernando Calvo y Pool UE

The Government has decided to maintain the ban on interrupting basic water, electricity and gas supplies for vulnerable consumers established in 2021. The measure will remain in force until 31 December 2025.

Similarly, the exceptional situation of the social voucher for electricity for vulnerable and severely vulnerable consumers is extended until 31 December 2025. In 2026, the final discounts will be 35% for vulnerable consumers and 50% for severely vulnerable consumers.

The Executive also maintains its support for sustainable mobility, with measures such as the extension, until 30 June, of the Moves III programme to support the purchase of electric and fuel cell vehicles and recharging points. In addition, the 15% deduction in personal income tax for the purchase of electric vehicles is extended until 31 December 2025 and deductions of up to 60% for energy efficiency improvements in homes are maintained until the same date.

Energy levy

The Council of Ministers has approved a Royal Decree-Law creating a new temporary energy tax during 2025, which will have to be paid by certain companies considered to be the main operators in energy sectors.

The head of the Executive explained that the main new item of the regulation is that it introduces a tax incentive that will be applied to strategic investments that are essential for the ecological transition and decarbonisation: "What we are doing is demonstrating that additional effort can be demanded from energy companies, while continuing with our roadmap of decarbonisation and boosting important industrial projects such as green hydrogen production."

Marisa Paredes, Grand Cross of Isabel La Católica

During his appearance, the president of the Government of Spain stressed the importance of the cultural sector for the Executive and announced that the Council of Ministers approved the posthumous awarding of the Grand Cross of Isabel La Católica to the recently deceased actress Marisa Paredes, whose work he described as "exceptional."

The Council of Ministers also approved the awarding of 38 Gold Medals for Fine Arts for 2024 to different personalities and institutions from the world of culture, including the singer Robe Iniesta, the actress Carmen Machi and the writer Elvira Lindo. "Artists who make our country great and, therefore, also our lives," concluded the president.

Non official translation