Your pension has a formula. Who pays when it breaks?

On 24 October 2026, with prices rising fast again, tens of thousands of people marched through Madrid to keep that last version, a month before a general election. Yet both main parties had already promised to keep it. If everyone agrees, what are the marchers afraid of losing?

There is no savings account with your name on it. The pensions paid this month come from the contributions of the people working this month, and when those fall short, the state budget covers the rest.

Inflation only sets the size of the bill. Each point of inflation that pensions follow costs Spain about €2.6 billion a year, and the cost never goes away, because next year's pension starts from this year's. When the money coming in falls short of what was promised, a gap opens, and only three numbers can move to close it: what pensioners get, what workers pay, and what the state puts in.

On paper, Spanish pensions were supposed to follow prices. But in May 2010, in the middle of a debt crisis, the government used an emergency decree to cancel the next year's increase for most pensions.

When a single decree can switch the rule off, the gap goes to whoever is easiest to skip in that year's budget. In a crisis, that turned out to be pensioners. So the next step seemed obvious: take the decision out of politicians' hands and let a formula tied to the system's own accounts make it.

In 2013 Spain wrote exactly that formula. Pensions would rise depending on whether the pension system was in balance; in deficit, they would rise by the minimum, 0.25%. The system was in deficit, so from 2014 to 2018 that is what pensioners got.

Nobody voted on any of those increases. While prices were flat, almost nobody noticed. Then prices started rising. From January 2018 pensioners in Bilbao gathered outside the town hall every Monday, and by March the municipal police counted more than 100,000 people in the city's streets.

The formula had sent the bill to pensioners, and it lasted only as long as pensioners accepted it. In 2021 Spain replaced it with the opposite formula.

Since 2022, Spanish law says that every January pensions rise by the average rise in prices over the previous twelve months. That is why pensions rose by 8.5% in 2023. The pensioners' number is now locked to prices.

So the gap moves to the other two numbers. The same reform added a new contribution on every wage, rising to 1.2% by 2029, and it does not raise the pension of the person who pays it. Whatever that does not cover falls on the state budget. Spain's independent fiscal watchdog, AIReF, projects pension spending growing by more than 4% a year until 2045, mostly because of the link to prices.

So the real question under this election is not whether pensioners get paid. It is who pays what the formula has already promised: the people working, the taxpayers, or one day a new formula that sends the bill back to pensioners.

Sweden built an automatic brake. In its earnings-based pension the contribution is fixed by law at 16%, so the only number left to move is the pension itself. Every year the system compares what it holds with what it owes; if that ratio drops below one, pensions are cut automatically. No minister signs anything, and no parliament votes.

After the financial crash the brake did exactly that: earnings-based pensions fell by about 3% in 2010, and the brake kicked in again in the years that followed. The system stayed in balance, and there was nobody to march against.

Price: the whole shock lands on pensioners, in the worst years. And parliament softened the brake: in 2009 it voted to spread each shock over three years, and later it cut income taxes for pensioners to offset the losses. Part of the bill went back to taxpayers, by a vote after all.

Since 2011, Britain's state pension has risen each April by whichever is highest: prices, wages, or 2.5%. The British call it the triple lock.

Compared with a pension that simply followed wages, Britain's budget watchdog estimates the lock costs about an extra half a percent of GDP each year over the long run. But the harder part is getting out. In September 2026 Prime Minister Andy Burnham proposed dropping the link to wages, but only from April 2030, and his own party was divided over it.

A lock that only turns one way can be changed only by a vote that looks like a cut.

Since 2005 a German formula has slowed pension increases whenever there are fewer workers paying in for each pensioner. When the gap opens, pensioners get a bit less than they otherwise would, and contributions rise a bit less than they otherwise would.

But on top of the formula sits a floor. A standard German pension, after 45 years on an average wage, must stay at no less than 48% of the average wage. In December 2025 the Bundestag extended that floor to 2031 and switched the formula off until then. The difference is paid from taxes: more than €200 billion in total by 2040.

Every automatic rule in this story met a vote in the end. Spain's formula met it in the street, Sweden's brake in parliament, Britain's lock at a party conference, and Germany's formula under its floor. A formula decides who pays, until enough people decide to change it.