Retirement age due to increase but certain professions will be able to retire early
Credit: Pixabay:geralt
In the light of recent debate on retirement and pension eligibility, Spain’s Social Security has just announced that it will be reducing retirement ages and awarding a full pension to those working in a selection of industries.
This comes at a time amid growing concerns that the requisites for retirement are becoming stricter. It is forecast that the Government will be tightening the benchmarks for retirement between now and 2027, making it increasingly more complicated to claim retirement pensions for those under 66 years. However, some concessions are now being made for selected professions whereby employees will be able to retire before 65 years.
By 2027, retirement age will rise to 67 years unless you work in one of several professions
Right now in Spain, the average employee can expect to be working until they are over 66 years old – unless they have been working and paying state contributions for over 38 years in which case they are eligible for earlier retirement of 65 years. It is anticipated that by 2027, retirement age will rise to 67 years. The government’s strict approach in this area stems from increasing life expectancy and an imbalanced population, with a growing elderly demographic and a declining birth rate. This growing elderly demographic puts financial pressure on the government with regards to pension supply; this explains why it is effectively encouraging employees to work further into old age and penalising those who retire early.
Early retirement available but conditions are stringent and concessions are limited
Like everything, there are some exceptions to the rule: Spain does allow early retirement for those who request it two years before the national retirement age. However, one must have paid state contributions for a minimum of 35 years and two of these years must fall in a period 15 years prior to the request for retirement. Known as “jubilación anticipada voluntaria” (voluntary early retirement), this option is burdened with numerous conditions that make early retirement far from easy. If this were not enough, these early retirement conditions also extend to the percentage of pension awarded. The penalty for retiring two years early for those who have not worked for over 38 years is a 21% reduction of the full pension quota. Inevitably, this strategy serves to discourage workers from taking early retirement.
The government’s latest initiative in response to demands for a more personalised approach to retirement proposes granting early retirement with 100% pension for the following trades:
- Mining workers
- Airline staff (plane crew, pilots, etc)
- Workers at sea
- Rail workers
- Artists, ballerinas and trapeze artists
- Bull fighters
- Firefighters
- Police force
Social Security will also concede other channels through which to access early retirement by 2025. Those who have worked and paid state contributions for over 36 years will be able to take partial early retirement at aged 62 years and eight months.
While the debate over retirement age and pensions continues, there is hope that the government’s recent steps—granting concessions to certain professions and acknowledging that a one-size-fits-all approach does not work—will lead to further positive changes. Although the bar for retirement remains high, these small shifts could pave the way for more flexible and fair policies in the years to come.
