New 2026 Spanish Pension Rule: New Retirees Can Exclude Worst Two Contribution Months
Starting January 1, 2026, new retirees in Spain will see a significant change in how their pensions are calculated. This new mechanism allows for the exclusion of some low-contribution months at the end of a career, potentially increasing the pension amount. The Social Security administration will automatically choose the most beneficial calculation method for the retiree.
Core of the New Calculation Mechanism
According to the pension reform of March 2023, from 2026, a dual system will be used to calculate the pension’s regulatory base (base reguladora). One track maintains the traditional method, using the contribution bases from the last 25 years (300 months) before retirement. The other track introduces a new formula: from the last 304 months (about 25.33 years) of contributions, the two worst months are excluded, with the calculation based on the higher contributions from the remaining 302 months.
The Social Security administration will calculate both outcomes simultaneously and automatically apply the option that results in a more favorable pension amount for the retiree. This measure is designed to reduce the negative impact of periods with low contributions (such as unemployment or pay cuts) on the final pension.
Gradual Implementation Plan
The new mechanism will be rolled out gradually, increasing the number of excludable months and the calculation period each year. In 2027, four of the worst months can be excluded from the last 308 months. This will increase incrementally each year until the full goal is reached in 2037: excluding the 24 worst months (equivalent to two years) from the last 348 months (29 years), ultimately calculating the regulatory base on the best 27 years of contributions.
This gradual design ensures a smooth transition for the reform while offering the potential for higher pensions to more retirees.
Scope and Impact
This change applies to recipients of contributory pensions who retire in 2026 or later. The parallel comparison of the traditional and new methods ensures no one is disadvantaged by the reform. The beneficiaries are expected to include those with frequent career interruptions, such as individuals with periods of low contributions due to childcare, unemployment, or job instability.
Additionally, the retirement age will continue to be adjusted in 2026: if contributions are less than 38 years and 3 months, the legal retirement age will be 66 years and 10 months. Those who have met this contribution requirement can retire with a full pension at 65.
