The rate of access to retirement pensions accelerates as the months go by due to the retirement of those born between the late 50s and early 60s. They are the ‘baby boom’ generation, a group that is on the verge of retirement and whose pace of access to retirement has already led Social Security to have more than 6.4 million benefits under its belt to pay every month.
Never before in the history of Spain have there been so many retirees or with pensions as high as those published this Tuesday by the Ministry of Inclusion and Social Security. For the first time, this barrier has been overcome to reach 6,401,291 retirement pensions. Along with them are 2.3 million widow’s benefits, more than 944,000 for disability and some 341,000 for orphanhood. In total, the system already pays 10,085,672 pensions of all types.
Just in the last month, just over 13,000 members of Social Security have accessed retirement. This is 2.05% more than the Spaniards who retired in the same period last year. This percentage is not trivial because it represents how the request for additions to the pension is accelerating exponentially as the year goes by. At the end of August, the rate of pension applications exceeded 2% year-on-year for the first time in history, compared to the margin of between 1% and 1.9% in which it had moved in recent years. This last month, with data from October, the growth in the number of pensions in force is already consolidated above that barrier.
The forecasts of the Ministry itself led by José Luis Escrivá anticipate an avalanche of retirements, which has already begun, although it has not yet reached its zenith. It will possibly be within a decade when Social Security accounts will be more stressed. In fact, the Government projects that net spending on pensions will average 14.2% of GDP during the years between 2022 and 2050, but it reduces this disbursement to an average of 12.4% once the income that will be generated by the measures implemented in the reform, such as the increase in maximum contributions, the new solidarity tax, the intergenerational equity mechanism (MEI), as well as incentives to delay the real retirement age or penalties for early retirement.
14 million children between 60 and 70
‘Baby boomers’ – a term that was first coined in the United States – are people born after World War II, when a population explosion occurred. In Spain it lagged behind the rest of the countries by more than a decade and this flood of births did not occur until the end of the 50s and beginning of the 70s. Between 1958 and 1977 alone, almost 14 million children were born, more than double the number in the previous twenty years and 4.5 million more than in the following twenty years.
With this incorporation of pensions, spending has exceeded another record figure, that of 12,075 million euros, destined for the payment of the ordinary monthly contributory pension payroll, 10.9% more than in the same month last year.
The ordinary monthly pension payroll exceeded 12,000 million euros for the first time in July and this month it once again marks a new historical high. This is due to the fact that, in application of the pension reform, these have increased by 8.5% by 2023 as a result of the average inflation of the period December 2021-November 2022, as well as the incorporation of pensioners, each time elderly.
On the other hand, the amount of the new average retirement pension reaches 1,571 euros per month, which is 2.76% more than a year before. As the ‘baby boomers’ enter retirement, the system is assuming greater benefits as it generally has workers who have long working lives and are much more stable than the current ones, so the amount of the pension is also more generous, in general. depending on current conditions.