Spain is approaching the ratio of two employees to one pensioner

by Deborah Cater
Ratio of two employees to every pensioner

The pension system and aging are important themes in Spain. However, the situation gets a little more dire every year as shown by the ratio of two employees to one pensioner in Spain.

Spain currently has 8.9 million pensioners and 19.3 million working people. Although it is already difficult to continue to guarantee pensions with this ratio, this will become even more complicated in the future. Increasing life expectancy and low birth rate are the main factors challenging the Spanish government.

Many Spaniards retire within 15 years

The government also needs to account for the many people in Spain born between 1950 and 1970. A small part of this group has just retired; but an even larger part will take this step in the next fifteen years. The Spanish Institute of Statistics (INE) uses the term ‘dependency ratio’ to represent the ratio of the number of retirees to the number of people in the active employment target group. At present, this ratio is 2.2 (one pensioner to 2.2 working people).

Government intervention required in the current pension system

According to the INE, the number of working people in Spain will decrease by 5 to 7 million by 2050. The Central Bank of Spain calculated the dependency ratio will fall to 1.5 by 2050; that is one pensioner to 1.5 working people. With these forecasts in mind, the Spanish government is currently negotiating a rigorous change to the pension system.

How many people in Spain receive benefits?

Of all retirees, most (6.03 million people) receive an old-age pension, 1.59 million people receive a survivor’s pension, 943,688 people receive a permanent disability benefit and 325,989 an orphan’s pension.

Ratio per Spanish regions quite different

Although the dependency ratio for the whole of Spain currently averages 2.2, there are regional differences. The situation in the Balearic Islands looks the most favorable with 2.99 workers per retiree. The situation is also better in Madrid (2.97) and Almería (2.94) than, for example, in Orense (1.08), where the ratio is almost one to one.

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