The Social security continues to record spectacular records of spent associated with the pensions and other benefits paid by the system to the 9.2 million beneficiaries it registered at the end of October 2024. Nor the gradual increase in the effective retirement age, which stands at 65.2 years – against the 64.4 years of 2019 -, neither the exponential decrease in early withdrawals, which are now less than a third of all registrations, nor the increase in retirement delays are serving to contain an overflowing expense that already represents almost one percentage point of GDP every month. Specifically, in October 12,895.8 million euros were allocated to the pension payroll, 6.8% more than a year ago.
This figure, beyond accounting for the upward spending path, reflects how the evolution in this case is almost double that of the revaluation carried out by the Government at the beginning of the year, which should be correlative. Behind this disproportionately greater increase in disbursement is the pressure exerted by the pensions that enter the system, each time in larger amounts, and much higher than those that are stopped being paid. Specifically, as of September – the latest data available on this heading, which has a one-month lag -, the new pensions of retirement from the general regime (this represents 47% of all contributory Social Security benefits) amounts to almost 1,750 euros per month -1,743.87 specifically-. A figure, however, that is 11% higher than the new registrations from a year ago.
Furthermore, it is worth remembering that these retirement pensions are on average 19% higher than those that are stopped payingwhich creates the breeding ground for the advance in spending assumed by Social Security to be greater than the increases applied under the pension revaluation system with the CPI. As ABC recently explained, this circumstance of simply replacing the benefits that enter the system with those that leave has resulted in an increase in spending of 16,000 million euros in the last six years.
For the department headed by the minister Elma Saiz The trend is acceptable and is discounted in the system accounts, as reported in this medium. However, Fedea experts consulted by ABC are more cautious with these figures, and explain these figures of exponential increase in the new retirement amounts of certain specific groups with better contribution rates and higher regulatory bases. According to Social Security, the gender gap supplements would also be resulting in this circumstance.
However, the latest budget execution balance of the public system shows an expenditure on contributory pensions of 110,460 million euros at the end of August. Only adding the two payrolls already disbursed for September (12,855 million) and October (12,895 million), the payments for this section of the budget amount to more than 136,000 million euros. There are still three payrolls to be paid, the November one with the extra one and December.
Income from contributions
At this point, it is worth remembering that the Government does not intend to request extra financing for the final spending rally that the system faces. Although, at the end of August, the contributions of companies and workers amounted to 108,788 million, almost 2,000 million more than the payment of contributory benefits. However, if we take into account the disbursements associated with other benefits, the account is already owed to Social Security, since this amount exceeds 127,000 million euros.
And this is where the use of the invaluable and necessary transfer of the State via General Budgetsthat is, taxes that have already been injected into the system just over 34,000 million in this period of time, 80% of the total recorded (43,463 million euros).
Despite the delay in retirement
This entire financial amalgam seems to fit the bill of the pension system, as it coexists with an initial achievement of the objectives of delay of effective retirement age that in the reform approved by the previous minister and current governor of the Bank of Spain, José Luis Escrivá, was the only way to save for the system for the coming decades. Specifically, worth about 19,000 million euros annually by the middle of the century.
As reported by Social Security in the October payroll, these wickers are already there despite not having a financial reflection. Between January and September 2024, 265,685 new pension registrations have been registered. From the analysis of the data, it appears that the figure of early retirements has been reduced and is below 30% of the total (28.9%). There are 76,793, which represents a decrease of 11.1% in early retirements compared to 2019 when anticipated 40% of the new retirements. While 71.1% accessed at ordinary age (188,828).
Also in this same period, 9.6% of the discharges corresponded to the delayed retirement modality compared to the 4.8% they represented in 2019. “As a result of the voluntary delay in the moment of retirement, the average age of access to the retirement benefit is 65.2 years, when in 2019 it was 64.4 years” , points out the department of Elma Saiz.
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