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'Work until 69 before pensions are paid' - states latest report

oldpersonA study presented this Friday, argues that the retirement age in Portugal will have to increase by three years, to 69-years-old, to ensure the sustainability of the pension system.

Given the demographic and macroeconomic scenario, the study published by the Francisco Manuel dos Santos Foundation, predicts that the number of pensioners is expected to grow from 2.7 million to 3.3 million between 2020 and 2045.

This means the retirement age needs to increase to avoid transfers of money from the general State budget.

"Increasing the retirement age seems to be the most effective way to reduce the need to fund the system through transfers from the State Budget," concluded the researchers.

In the study on the ‘Sustainability of the Portuguese Pension System’ collated by the Institute of Social Sciences of the University of Lisbon for the Foundation, the researchers said the facts are incontrovertible and are rooted in a demographic evolution.

Given the real prospect of a reduction of 23% in the population of Portugal in the next 50 years, the authors predict that the number of workers will drop by 37% between 2020 and 2070, which will "decisively limit" the growth potential of the Portuguese economy in the same period.

Despite the fall in the number of workers, the study predicts that the value of Social Security contributions will grow slightly in the period under review, from 8.1% of GDP to 8.7%.

But this is not enough, "This slight increase in contributions will not be sufficient to compensate for the increase in pension expenditure under the Social Security Welfare Regime, which will start to register chronic deficits as from 2027," the document states.

The situation will get worse if productivity and wages do not grow at the pace predicted by the European Commission in its macroeconomic scenario.

The researchers also predict a deterioration in the value of pensions compared to wages, which will contribute to raising the poverty rate among pensioners.

The authors of the study looked at reforms needed and suggested increasing workers’ and employers’ contributions to the social security fund, dropping pension levels and transferring money from the State budget each year.

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Comments  

+2 #7 charly 2019-04-14 09:24
PeterD, the best advice that one can give you is that a ask a good and trustfull PORTUGESE jurist
to look after your administrative matters (i.c. your pension) because - in general - portugese ad staff is not indulgent with foreigners.
+5 #6 Luff-a-lott 2019-04-14 07:56
You have to remember that you can apply for a pension but you might not get it, my mum worked overseas for some time (she is Portuguese) but now in Portugal only gets €170 per month and a similar amount from overseas, it will be tough for some when they get old,
+5 #5 PeterD 2019-04-13 17:49
I am nearly 2 years over the retirement age and still no reply about my pension. I definitely qualify but SS make it very hard to speak to anyone or complain. As far as I can see they have already unofficially moved the entitlement age. Considering the high levels of contributions charged this is official robbery in my opinion.
+4 #4 charly 2019-04-13 10:55
Dear Ed, as salaries and pensions might be published freely in Portugal maybe it should be fantastic to put hands on such a listing of high level state pensionistas and to publish it. I remember of a general having 38.000 €, Salgados 56.000 €, etc.... Fenomenal amounts !
+4 #3 charly 2019-04-13 08:02
"pension" in Portugal is not ment for the workers or the middle class... it is the matter for the "white collars" who receive astonishing pensions. Pensions of 10.000 € and far more are "normal" for them. So, why loosing time to discuss "peanuts" of 300, 500, … € per month … you loose your time !
+4 #2 Dierdre 2019-04-13 06:13
Having attempted to run a small business here in Portugal there is total idiocy around the obsession to charge social security to businesses regardless of how healthy they are. Particularly relevant if income is seasonal such as tourism or farming or awaiting licensing to even start.
Common sense (clearly lacking here in Portugal) is to allow companies to step out, or reduce these monthly outgoings and catch up later. As in say the UK. But then, as with everything else in Portugal, this would achieve nothing. The arrangement would be abused and strong companies would step out from paying SS too!
+11 #1 Stefan D 2019-04-12 19:00
You poor people!

I'm 67 and the idea of still working, perhaps manually, at this age appalls me.

It demonstrates the problems when young people leave and the country is badly managed.

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