Andorra's 2026 Budget Boosts Low Pensions Amid Housing and Elder Care Concerns

Fèlix Zapatero, president of the Federation of Elderly Associations, has welcomed the tiered pension increases outlined in Andorra's 2026 budget, approved this week, while raising concerns over housing pressures and inadequate retirement home capacity ahead of the 2027 rent freeze lift.

The budget introduces escalatory raises for lower pensions, fulfilling a key demand the federation raised with the head of government last October during the Festa Magna. Retirement and widowhood pensions below the minimum wage of €1,525 will rise 5.4%—double the 2025 inflation rate of 2.7%—with retroactive effect from 1 January, pending final signing. Those between one and two times the minimum wage get a 2.7% uplift matching inflation; between two and three times, 25% of inflation; and those above three times remain frozen.

Zapatero described the measure as "generous" for the lowest earners, noting high pensions—held by just 80-90 people—affect few and often supplement foreign pensions from countries like Spain, France or Portugal. He cautioned against misleading averages: the €1,200 mean pension reflects shorter contribution periods for late arrivals, such as those starting work in Andorra at 40, compared to locals from age 18. For 35-40 years of contributions, averages reach €1,300-1,400.

The federation continues pushing for a €5 million boost to the €2 billion Retirement Reserve Fund, a practice in Spain and France, though the government rejected it, citing sufficient funding. Zapatero highlighted stalled contribution rate hikes—currently 22% versus 40% abroad—as essential to combat 22% elderly poverty risk, urging parliamentary consensus despite pre-electoral caution.

Housing woes compound risks, with no new retirement homes underway and slow expansion of public or subsidised places. The 2027 rent thaw, though regulated, threatens tenants amid limited affordable stock. Government efforts include contacting 800 tourist flat owners to shift to rentals, plus new public housing: 70 units in Arinsal this February, slow progress at Pessebre in Escaldes-Engordany, Canillo units, 18 refurbished flats in Andorra la Vella via Reviu, and tutored housing in Sant Julià by Fundació Laurus. Zapatero called these positive but small-scale against total market volume.

Youth leaders echo housing strains driving "talent flight." Fórum de la Joventut president Lisa Cruz said emancipation is "practically impossible" due to high costs curbing savings and stability, with government programmes geared to families or high earners. "It's easier to find a future outside Andorra," she added, calling for better data and social protections.

Political voices concur. PS councillor Laia Moliné deemed guarantee schemes unviable for youth lacking cushions for purchases or rents, urging a comprehensive housing law, price index and anti-speculation measures: "Andorra expels the young." Andorra Endavant's Carine Montaner proposed modular homes on public land prioritising young Andorrans, professionals and entrepreneurs to foster roots and idea-sharing. Concòrdia's Clara Grau saw youth issues mirroring broader vulnerabilities, advocating heavy public housing investment and foreign investment curbs to stem speculation and encourage returns post-study. All criticised guarantee programmes as mismatched for young people.