Spain is the latest country to crackdown on pensions as part of a system reform. People will no longer be able to retire early unless they have a lengthy amount of pension contributions
People living in Spain have been issued a warning following a reform to the country’s pension system.
Spanish residents have been hit by a string of measures which could shove the retirement age higher. It comes as officials have changed the rules for pension contributions. This year, locals will still be able to retire at 65, but only if they have earned a minimum of 38 years and 3 months of contributions. Annoyingly, if you’ve paid in less, then you will be unable to retire until 66 years and eight months.
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By 2026, you will have to wait an additional two months. The changes should help officials meet the objective of raising the retirement age to 67 in 2027. Spain’s Social Security said the move would help “guarantee the long-term sustainability of the pension system and ensure it continues to provide fair pensions.”
Unfortunately, the reform is likely to take a toll on anyone who wishes to retire at an earlier stage in life. For example, if you wanted to retire at 63, you would still need a total of 38 years and 3 months in contributions, reports EuroWeekly.
Anyone who would like to say their goodbyes to working before the official retirement age, will have to patiently wait until 64 years and 8 months, if they don’t have the required contributions. However, you would still need at least 35 years of contributions.
Even if you manage to tick off all of the above boxes, sanctions such as monthly pension reductions could also be a problem.
Last month, the institute for actuaries in Spain warned that the difference between what people contribute and what they receive “has continued to worsen over the last five years”, reports Sur in English.
The report stated: “The reforms undertaken in 2021 and 2023 have been insufficient and have failed to curb the growing imbalance between the actuarial present value of the pension income a person receives in retirement and the actuarial present value of the pension contributions they have made during their working career.”