How to live such a long life. In 2013 and under covert pressure from Brussels, the central government – then under Mariano Rajoy – believed it had the answer to this investigation, at least economically. It did this with the so-called sustainability factor, a mechanism designed to guarantee the long-term sustainability of the public pension system. In essence, it consisted of gradually reducing the amount of new benefits each year: payouts will be lower, but they will be charged longer due to the increase in life expectancy.. If Spaniards lived an average of 77 years in 1990, it is estimated that they will exceed 85 by the end of this decade. Former Spaniards received public pensions for about twelve years; twenty seconds will do. This leitmotiv It is this sustainability factor that has been buried with the change of government. However, the latest aging report aging report The European Commission continues this planning in its latest estimates. Despite the government’s optimism about the future preservation of the living standard of the elderly, They think payments will continue to decline in Brussels. Those who retire by 2070 they will only enter 40% of their final salary as a contribution.
Two measures emerged from the 2013 reform: the sustainability factor and an index that allows payments to be increased by only 0.25% each year, regardless of inflation. Both were canceled and replaced, but this official study from Brussels only took the guesswork out of analyzing the future scenario: pensions will be revalued with CPI. It’s as if the sustainability factor, which was never implemented – will come into effect in 2023 – will take effect. Therefore, he calculated how much the payments would cost by increasing it at the rate of inflation, ignoring that there would be no deductions. This report Aging Report 2021It is mentioned about twenty times in the work. Stability Program 2022-2025 He said the executive sent it to Brussels this Friday, which reduced the GDP growth rate as a result of the inflationary escalation and the occupation of Ukraine. In the same text, Madrid, the next aging report It will sum up its measures (until 2024) and confirm that public pensions will not, at least, fall suddenly.
For a salary of 1,000 euros, the replacement rate will leave 413 pensions per month
The European Commission is comparing what the new pensions will look like with the final salary. This is called the replacement rate.. Today, the Spanish public system guarantees people who retire from working life, on average, 77% of the salary. It is the highest rate in the entire European Union, followed by Portugal (74), Greece (69) and Luxembourg (67.1).
In other countries of the continent, the weight of public funding is much lower, as it is supplemented by special schemes or programmes. austria backpack. Looking at 2070, all public pensions will fall relative to the last salary, always according to this report. However no country will experience such a significant outage as in Spain. In the EU as a whole, the substitution rate is 46% and will drop to 37.5% in almost half a century; In Spain we start from this 77% and reach 2070 with 41.3%. This changing for example, for an existing minimum wage (SMI 1,000 euros), it would be equivalent to a public pension of 413 euros per month.
Regardless of the final adjustment made by the European Commission to these estimates, as the government envisioned, the future outlook is very complex. Brussels calculates that the Spanish population will peak at 49.3 million around 2050, but will reach 2070 below the current threshold (47 million). And the cost of the system will not stop growing without a large next-gen base to support it. Today, the rate of the inactive population (over 65 and under 20) is 32%, and it predicts that it will exceed 65% in fifty years. This will be the panorama in Galicia: more than six out of ten inhabitants will be dependent on the State or their parents.and that their contributions as a taxpayer will be for their income as they retire.
Source: Informacion
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