The average retirement age in Portugal should rise to 68 years for a man who started his working life at the age of 22 and by 2022, the Organization for Economic Co-operation and Development (OECD) admits in the report ‘Pensions at a glance’, released yesterday. This projection places Portugal among countries where the retirement age will be one of the highest in the future, namely the fifth highest. It also means 2.4 years longer compared to the current average in the country.
Young Portuguese who have now entered the labor market will have to remain active 1.7 years longer than the average of their counterparts in OECD countries (66.3 years) to guarantee a full pension. “In the future, and taking into account the measures already laid down in law, the average normal retirement age in the OECD will increase by two years to 66.3 years for a man entering the labor market in 2022,” the document reads . Currently, the average retirement age in the OECD is 64.4 years, 1.2 years less than in Portugal, the report said.
The document shows that Denmark is seeing the biggest increase in the retirement age, a country where it will rise from 67 to 74. Italy (from 65 to 71 years), Estonia (from 64.3 to 71 years), the Netherlands (66.6 to 70 years) and Sweden (65 to 70 years) also stand out with significant increases. Finland and Slovakia are both expected to move to 69 years. According to OECD accounts, Portuguese workers will see the retirement age rise from the current 65.6 years to 68 years, the fifth highest retirement age. Of the 38 countries that make up this organization, the study admits that an increase will occur in 20 countries.
The increase in the number of years of work to guarantee a full old-age pension in Portugal is due to the increase in life expectancy. Just last week, the regulation was published that sets the retirement age in 2025 at 66.7 years, three months more compared to 2024. Recall that for 2024 the retirement age remained unchanged compared to 2023, at 66.4 years, after a decrease of three months compared to 2023. to the age set for 2022. These two changes were the result of the decrease in average life expectancy due to the Covid-19 pandemic.
The OECD report also notes that Portuguese men have a life expectancy of 17.5 years when they end their working lives, nine months less than the OECD average, and that Portuguese women have 22.6 years, less than two months.
The OECD included an analysis of inflation and pensions in the document and pointed out that “in the short term, with the erosion of real wages, indexation [da atualização das pensões] The report emphasizes that this type of indexation also appears to be “more expensive than expected” for government finances or pension providers. “The coherent application of indexation rules is essential to strengthen confidence in pension systems,” but protecting pensioners “against inflation spikes” has proven “expensive.”
The document also states that these exceptional circumstances raise a number of ‘thorny’ questions that could justify ‘exceptional deviations’ from the rules, and that it could ‘perhaps’ be considered fair for the most privileged pensioners to share some of the effort required would ‘share’. of the working population, who accept a smaller increase in their pensions.
“The application of existing indexation rules or their deviation in response to rapid inflation depends in each country on fiscal space and political preferences,” the document said.
Protecting lower pensions while limiting the impact of discounting (when indexed to inflation) on public finances in periods of high inflation can be achieved by limiting pension increases above a certain value level, he suggests.
In Portugal, pension updates follow inflation and economic growth, with the formula prescribing differentiated (and less generous) increases for higher pensions, and there is even a brake on the update for pensions above a certain value.
With Lusa
Source: DN
