Individual pension plans in Spain reached an all-time high in 2024, showcasing robust growth despite challenges posed by regulatory changes. A recent report from Observatorio INVERCO reveals a significant surge in average participant wealth, primarily fueled by dynamic financial markets. This performance underscores the evolving landscape of long-term savings in the country, marked by regional variations and a growing preference for equity-linked investments.
Record Growth and Market Momentum
The average wealth per participant in individual pension plans in Spain saw a notable 9% increase in 2024, climbing to a record €12,600. This milestone, detailed in the INVERCO annual report, pushed the total assets in these plans to an impressive €92.242 billion, an 8.6% rise from the previous year. This growth trajectory was predominantly driven by the revaluation of financial markets, which effectively counteracted the decline in contributions resulting from the 2021 reduction of the annual legal contribution limit to €1,500. Furthermore, investment strategies have shifted, with over 83% of total savings now incorporating an equity component, reflecting a strong recovery in stock markets. This emphasis on variable income plans has yielded higher average assets (€19,245) compared to mixed or fixed-income options.
Regional Disparities and Future Incentives
While national averages paint a picture of growth, significant regional disparities persist. Navarra once again led the nation in average savings per participant (€18,546), followed by País Vasco (€15,593) and Madrid (€15,413), with 21 provinces surpassing the national average. In terms of total asset concentration, Cataluña and Madrid together accounted for a substantial 46% of the overall patrimony, with these two along with Andalucía and Comunidad Valenciana collectively holding 65.8%. Despite the overall growth, the report highlights a critical concern: since the 2021 contribution limit reduction, accumulated savings have grown €9.8 billion less than they otherwise would have. Both INVERCO and the OECD advocate for increased fiscal incentives, such as expanding tax deductibility and decoupling financial limits from fiscal restrictions, to further stimulate long-term savings and enhance citizens' financial security.
