Could you live in Spain on €547 a month? Millions do

The answer for most of us is probably "are you having a laugh?".  Even without rent or mortgage payments, utilities, taxes and food would surely use up €547 a month however frugally you lived.

But that is Spain's minimum state pension and about half of Spanish retirees have to make do with it although couples get more: €752.

The average monthly pension for those who have sufficient contributions to qualify for more than the minimum is €936.  It is getting harder and harder to get a "contributory" pension i.e. more than the minimum, based on contributions from work or self-employment.  The minimum number of years' contributions required is increasing from 15 to 25 and the retirement age is going up.  But it is all happening in stages and there are some complications - we have just published a guide on our website Spanish Pension Benefits 2012.

Although the state pension has risen only 1% this year there are more pensioners so the overall cost is up more than 4%. You wonder how the government can go on paying these pensions with so many should-be taxpayers unemployed or working in the black economy.

As for the pensioners trying to live on the minimum pension I don't see how they could particularly if they are living on their own and have housing costs to pay.  Spain has become an expensive country.  When I arrived in the late 90s pretty much everything seemed cheap compared to Britain but now very few categories of expenditure are.  There isn't the same culture of bargains, offers, price-cutting, presumably down to a lack of competition.

I guess the answer is to save more for retirement but that is hardly being made easy at the moment.