Alex Trelinski
SPAIN’S state pension system is feeling the strain of ‘baby boomers’ taking retirement coupled with longer life expectancy resulting in the annual gap between claimants and those who die rising to 35%.
That’s despite extra income being generated by more people working resulting in higher social security contributions.
In 2024, the government said that 368,065 new state pension registrations were made, the highest for a single year and 42,000 above those in 2023- a 13% increase.
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That includes people born between 1958 and 1977, including those from 1959 who would have reached the retirement age of 65.
Between 1958 and 1977, there were 14 million births in Spain, up by 2.5 million compared to the previous 20 years and 4.5 million more than in the 80s and 90s.
It means that the so-called ‘baby boomers’ are starting to reach retirement age and making state pension claims.
The uptake is such that 2024 was the second successive year when there more more new pensioners registered compared to birth.
The number of people leaving the state pension system last year as a result of death only went up by 3%.
In effect the gap between new retirees and those who passed away reached 35% last year compared to 23% two years ago, and 13% in 2019.
Spain’s Social Security department has also recorded a record level of retirement registrations though there has been a notable rise in people delaying retirements and taking part of their pension pot.
The problem for the country is that the numbers don’t balance and though income from social security contributions went up last year by 6.7%, the system is ‘in the red’ to the tune of €8.4 billion.
Another factor is that not only are pensioner numbers rising, they are also getting a higher payout from the state.
Social Security figures showed that payments for new retirees reached €1,566 every four weeks by the end of 2024.
That figure has so far this year gone up to €1,761 on average and pension spending is over €13.5 billion per month.
As in other countries, later retirement ages over the next 25 years will be very much the order of the day, as Spain tries to bridge the income and expenditure gap.
