The Government expects that the average retirement age will rise by 1.6 years in 2050 due to incentives to delay it

The number of pensions will reach its maximum in 2053, with 14.8 million contributory pensions, of which more than 70% will be retirement pensions

MADRID, 11 Oct. (EUROPA PRESS) -

The Government estimates that the average retirement age will rise by 1.6 years in 2050, reaching around 65.5 years, as a result of the incentives included in the pension reform to encourage delaying retirement and the elimination of forced retirement clauses in collective agreements.

This is reflected in the report on pension spending projections published by the Ministry of Inclusion, Social Security and Migration in compliance with one of the milestones committed to Brussels within the framework of the Recovery Plan.

The 2021 pension reform included two types of incentives for those who decide to voluntarily delay their retirement beyond the legal age, consisting of an additional 4% percentage on the amount of the corresponding pension or a lump sum that is paid in a single payment.

Initially, both types of incentives could not be combined, but since May 18 they can be combined at the interested party's choice.

In the first five months of this year, 8% of the total retirement registrations correspond to delayed retirements, almost double that of the same period in 2021, the last year in which the new incentives were not yet deployed.

In addition, Social Security highlights that the tendency to delay voluntary early retirement has become stronger, so that only 18% of those who retire anticipate the maximum possible (24 months), compared to 46% in 2021 and 26% in 2022.

Thus, in two years, the average retirement age of those requesting early retirement has increased from 63.5 to 63.9 years. All of this has contributed to raising the effective retirement age to 65 years for the first time.

The Social Security projections included in this report suggest that in the first years, delayed retirement registrations will decrease, but around 2040 these differences will be reduced "notably" because those who were delayed in previous years will retire, thus compensating for the new delayed retirement registrations.

As a consequence of the impact of the new incentives for voluntary delaying retirement, Social Security estimates that the employment rate of those over 65 years of age will rise from 18.4% to 27.8%, while that of those over 55 years old would increase from 43.8% to 48.9% in 2050.

The employment rates of those aged 65 and 66 are those that experience the greatest increase due to the progressive increase in the ordinary retirement age to 67 years in 2027. In this scenario there will be an increase in the average retirement age of 1 .6 years in 2050, according to the Ministry's projections report.

In coherence with the pattern of population aging expected for the coming years, Social Security estimates that the number of contributory pensions, currently slightly above 10 million, will increase its growth slope from 2025 to 2050, and then change trend and even decrease once the retirements of the 'baby boomers' have passed.

Thus, the Ministry foresees that the total number of contributory pensions will reach its maximum figure in 2053, with 14,828,356 pensions, of which more than 70% correspond to retirement pensions and around 21% represent widow's pensions.

According to the calculations of the Department headed by José Luis Escrivá, the number of retirement registrations will reach its maximum in the year 2039, with 528,837 registrations.

Regarding the other types of contributory pensions, the projection indicates that those for permanent disability will be less sensitive to the aging process, while those for widowhood show a growing trend throughout practically the entire projected period, although without replicating the pattern of aging population that is seen in retirement.

"This is because access to the widow's pension derives from the death of an asset or liability, which somewhat mitigates the demographic effect, without forgetting that this type of pension decreases with increases in life expectancy" , the report notes.

The projections made by Social Security in this report, which cover up to 2050 in some cases and up to 2070 in others, are based on a resident population in 2023 of 47.8 million inhabitants, which will reach 52.4 million in 2050. Therefore, in the period between 2023-2050, Spain would gain 4,573,608 inhabitants, 9.57% more.

The Ministry expects that the increase in the activity rate from the current 79.4% to 84% in 2050 will lead to an increase in the active population between 20 and 64 years old from almost 23 million people in 2023 to 24 .23 million in 2035. From that moment on, the active population will reduce, reaching 23.23 million people in 2050.

Regarding the behavior of the employed population between 20 and 64 years old, the report foresees an increase of almost ten points in the employment rate between 2023 and 2050, going from 69.7% to 79.4%.

Regarding the unemployment rate, the Ministry expects its evolution to be favorable in all age groups. For the age group between 20 and 64 years old, the unemployment rate will rise from 12.2% in 2023 to 5.5% in 2050.

In the short term, Social Security points out that the generation of employment in the ICT sectors, the reduction of temporary employment and the new ERTE of the labor reform and the reform of active employment policies "will have a notable impact on the reduction of unemployment structural", so that the number of structurally unemployed will be reduced by 55%.

As a consequence of these factors, the Ministry estimates the decrease in the structural unemployed at 510,000 people between 2018 and 2025, from 3.1 million unemployed to 2.6 million.

With regard to migratory flows, Social Security projections are similar to those of the INE, which places net migration in 2022 at almost 500,000 people to decline and reach minimums in 2036. From that moment on, net migration It increases slowly linearly until reaching around 250,000 in 2050.

The fundamental premise of the Social Security migration model is based on the fact that net flows are "endogenous" to the dynamics of the national labor market, since they respond to the demand for employment that will occur as a consequence of the evolution of the natural population and the gradual reduction of unemployment.

Thus, the Ministry points out, "migratory flows will contribute significantly to compensating for labor shortages in the labor market in Spain."

If the exercise of maintaining the 2022 employment rate (68.6%) in 2050 were carried out, with an immigration level of 243,000 people, those employed would be reduced by 10.4%, leaving two million positions unfilled. of work.

"Therefore, to maintain existing jobs, the employment rate will have to increase, converging to the current rate in Germany, Holland and Belgium. If the employment rate converges to 95%, there will be an interannual increase in employment of the 0.3% and, on the other hand, if it converges to 100%, there will be a year-on-year increase in employment of 0.5%," the report states.