Pension Gap Widens Despite Dollar Income Surge

Despite official statements highlighting Türkiye’s rising per capita income, which approaches $18,000, newly compiled data suggest that the economic gains reflected in dollar-based metrics have not translated into improved welfare for a significant segment of retirees.

A study prepared by economist Prof. Dr. Aziz Çelik, based on social security data, reveals that the proportion of retirees receiving the lowest statutory pension has nearly doubled since 2021. While macroeconomic indicators point to nominal growth in gross domestic product (GDP), pension distribution trends suggest a widening disconnect between headline figures and household-level income realities.

In 2021, when per capita income was approximately $9,600, approximately 16% of retirees received the minimum pension. By 2026, even as per capita income projections approach $18,000, that ratio has climbed to 30%, marking a historic high.

Nominal Growth vs. Real Purchasing Power

The discussion gained renewed attention following remarks by Vice President Cevdet Yılmaz, who recently stated during a business meeting in Mersin that Türkiye is approaching a nominal per capita income of $18,000 as of 2025.

However, economists note that nominal GDP growth, particularly in dollar terms, can be influenced by inflation dynamics and exchange rate movements. When domestic inflation remains high and exchange rate adjustments lag, dollar-based national income figures may rise on paper without proportionate gains in purchasing power.

This dynamic appears to be reflected in pension data. While minimum pension payments have been raised in Turkish lira terms over the years, the share of retirees in the lowest payment bracket has increased significantly.

Sharp Increase in Minimum Pension Recipients

According to the compiled figures, the growth in the number of retirees receiving the minimum pension has been striking over the past seven years.

In 2019, when the minimum monthly pension was set at 1,000 TL, approximately 800,000 retirees fell into that category, representing about 7% of total pensioners.

By April 2023, after the minimum pension was increased to 7,500 TL, the number of recipients surged to 4.5 million, pushing the ratio to 30%.

As of January 2026, with the minimum pension set at 20,000 TL, the number of retirees in this bracket has reached approximately 4.9 million.

With an estimated total retiree population of 16.25 million in 2026, roughly three out of every ten pensioners receive the minimum monthly benefit.

Structural Pressures on Pension Distribution

The data suggests that while minimum pension adjustments have aimed to cushion the effects of inflation, they have also expanded the lower-income segment within the retiree population.

Several structural factors may contribute to this trend, including wage distribution patterns during working years, contribution records, and recalibration mechanisms within the social security system. When lower-income workers retire, their benefits often cluster around the statutory minimum, particularly during periods of rapid inflation.

Moreover, increases in the minimum pension can create a compression effect, whereby retirees with previously slightly higher benefits are effectively aligned with the new base level.

Macroeconomic Indicators and Social Outcomes

The divergence between dollar-based income growth and pension distribution highlights a broader economic debate: how macroeconomic gains are distributed across society.

While rising per capita income can signal improved aggregate performance, it does not necessarily capture income inequality, shifts in purchasing power, or sector-specific vulnerabilities. Retirees, who rely on fixed monthly payments, are particularly sensitive to inflation and cost-of-living increases.

As Türkiye navigates inflation management, fiscal policy adjustments, and growth strategies, the evolution of pension income distribution will likely remain a focal point in discussions about social equity and economic sustainability.

For policymakers, the challenge lies in balancing macroeconomic stabilization with targeted social protections, particularly for lower-income pensioners.