The new pensions that cause registration in Social Security (adding all types of pensions: widowhood, orphanhood, retirees) reached an average of 61.4 years, a figure that adds the average of the first half of the year and that improves slightly ( 1.3%) the data recorded in the period from 2015 to 2021, which reached an average age of 60.6 years but is five years below the legal age, at 66.2. One of the reasons that may condition the decision to postpone retirement for a longer or shorter time are the incentives recently introduced for this year, with the aim of equalizing the real age and the legal retirement age, although the average retirement age exceeds 64 years.
The most notable change is that the turnover reflects higher amounts among people new to the public pension system. In the first six months of the year, the average pension of this group of pensioners exceeds 1,180 euros, 9.4% more than the average amount that new registrations began to receive in the previous seven years (1,083 euros per month).
Following the recommendations of the Pact of Toledo related to promoting the balance between the real retirement age, which shows a stagnation at 64 years. It also calls for measures for the voluntary extension of working life, making pension and income from a professional activity compatible through active retirement, together with penalties for early retirement.
Thus, the portfolio of José Luis Escrivá decided to introduce new incentives that encourage a stretching of working careers. In the report, Social Security relies mainly on shielding the purchasing power of the collective through revaluation with the CPI as attractive. But, mainly, it is based on the reinforcement of incentives.
In 2022, an additional percentage of 4% was introduced for delayed retirements and a “flat rate” amount based on the amount of the pension that rewards the longest contribution careers. In the latter case, the incentive can be a check of up to 12,000 euros. In any case, the retiree also has the option of combining both options.
The age analysis
The sample that represents the more than 250,000 retirements up to June, with an average age of 61.4 years, is the first starting point for analyzing the impact of the measures to encourage the lengthening of working careers. From the Ministry of Social Security, they explain that “everything seems to indicate that the incentives have to do with it.”
Of course, they explain that it is early to analyze these data in a deep and conclusive way. As it is only six months old, they consider that it is not a sufficiently reliable sample to compare and analyze the impact of the measures, something that they will probably do in the coming months to see the evolution of the measures introduced.
The objective continues to be to equalize the average retirement age, which currently stands at around 64 years on average, with the legal retirement age that will gradually increase until reaching 67 years in 2027, if there is no reform in this regard .
More ‘expensive’ pensions
The rotation of registrations and withdrawals of pensioners from the Spanish system, as provided by the National Institute of Social Security (INSS), reflects the path of rising average incomes. Specifically, the average income of people who left the system, with an average of close to 80 years, has been 925 euros between 2015 and 2021.
On the other hand, the income that Social Security must pay to workers who abandon their careers to collect the pension amounted to 1,083 euros, which represents a gap of 158 euros or 17% higher.
These data reflect the growing pressure on the coffers of the public pension system, which will also have to face the progressive retirement of a generation as numerous as the baby boomers, for whose retirement they have also introduced an increase in contributions (the Intergenerational Equity Mechanism). to increase revenue.
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