Average purchasing power up by 3.6 percent in 2024

The figures in this report relate to changes in median purchasing power. Median means that half the population (or population group) saw a smaller increase in purchasing power, while the other half saw a larger (or equal) increase. Trends in purchasing power are associated with the main source of income of a given household.

Larger increase in purchasing power among working people

Three-quarters of all those in working households saw an increase in their purchasing power. Their purchasing power rose sharply, by 5.3 percent on average. The increase in negotiated wages of 6.8 percent was offset by 3.1 percent inflation, bringing the real change in wages to 3.7 percent. Workers also benefited from another increase in the tax credit for employed persons. Those in employment can also increase their purchasing power via other routes, such as by working more hours or by changing to a job with higher pay. Conversely, losing a job or choosing to work fewer hours are among the possible reasons for a decline in purchasing power, which was the case for 30 percent of employees.

The increase in purchasing power among self-employed persons (3.1 percent on average) was lower than the increase among employees. Measures that had a negative effect on purchasing power, such as the reduction in the tax exemption for SMEs and self-employed persons, meant that the increase in purchasing power was less pronounced among this group.

End of energy allowance had negative effect on purchasing power

The increase in purchasing power among households on income support was 0.2 percent. In 2023, recipients of income support and others in low-income households were still receiving the energy allowance (usually 1,300 euros) to help cover the sharp increase in the cost of energy. The discontinuation of the energy allowance in 2024 had a downward effect on purchasing power among low-income households. The increase in the minimum wage, and in the income support payments and state pension that are linked to it, as well as increases in housing benefit and child benefits, meant that the discontinuation of the energy allowance was not accompanied by a drop in purchasing power, however.

Among pensioners, purchasing power rose by an average of 1.8 percent in 2024. This was the first increase in purchasing power for this group, after three consecutive years of decline. People with supplementary pensions benefited from indexation in addition to a real-terms increase in the state pension. Pensioners in the lowest income decile saw a small drop in their purchasing power, however. The increases in the state pension and housing benefit did not fully make up for the loss of the energy allowance. The purchasing power of pensioners in the highest income group fell by 1.8 percent, on average. This was due to the increased tax rate and the freezing of the threshold above which tax is payable on assets (known as ‘box 3’).

Substantial increase in purchasing power among those with children

Due to changes in the benefits paid to people with children, households with children gained more than those living alone and couples without children, on average. For a two-parent family, the average increase in purchasing power was 5.6 percent and for a single-parent family it was 4.8 percent.