MADRID – Since the pension reform of 2011, the system in Spain changes from year to year. It considers retirement age, number of years of contribution, and amount to be received.
Currently, the ordinary retirement age is 66. However, in 2021, those who have contributed for 37 years, and 3 months will be able to retire at 65 and obtain 100% of the retirement pension. Furthermore, the objective of the reform is that by 2027 the maximum retirement age will be 67 years, if 38 and a half years have not been reached.
Whereas in 2022, as part of the ongoing reform, there will be a further variation. Employees who intend to retire next year will only be able to do so at age 65 if they have contributed a minimum of 37 years and 6 months. Otherwise, they will have to wait until 66 years and two months to be able to receive 100% pension. Furthermore, these amounts will continue to progressively increase until 2027 as follows:
- 2023 – contribute a minimum of 37 years and 9 months or wait until you are 66 years and 4 months.
- 2024 – to quote a minimum of 38 years or wait until you are 66 years and 6 months.
- 2025 – contribute a minimum of 38 years and 3 months or wait until you are 66 years and 8 months.
- 2026 – contribute a minimum of 38 years and 3 months or wait until you are 66 years and 10 months.
- 2027 – contribute a minimum of 38 years and 6 months or wait until you are 67 years old.
Minimum 15 years
However, to qualify for any pension payments, workers must have contributed at least 15 years. Two years of which must be within the last 15 immediately before application. Those with 15 years minimum contributions, will be entitled to 50% of the pension. Then, from year 16, for each full extra month of work, up to the first 106 months, there is an additional 0.21% more on the base. From month 107 to month 252, this is 0.19% of the regulatory base.
Consumer price index
As reported previously, the aspect that will most affect retirees is that pensions will be updated based on the price index of consumption (CPI). Additionally, those that wish to combine some work or retire later, will be rewarded.
According to CaixaBank research, “In short, there is no doubt that the pension reforms presented over the last two years are necessary to halt the deterioration in the Social Security accounts. Moreover, all the evidence suggests they have helped to take an important step forward toward long-term sustainability.”