With the reduction in the working population associated with aging and the prospect of stabilization in the tax burden, Portugal will, within two and a half decades, be at the top of the list of European Union countries whose public finances will face the greatest pressure due to pension costs, behind only Spain, according to Jornal de Negócios.

According to the European Commission's most recent annual report on taxation, the payment of pensions should consume, in 2050, a little more than 40% of the country's tax and contribution revenue, that is, four out of every ten euros received by the Tax and Customs Authority (AT) and Social Security.

This represents a significant worsening compared to the baseline data in the study, still from 2022, when the share of public revenue needed to support pensions remained below 35%. On average, the burden of pension costs will be 39.1% over the next two decades.

In the document, Brussels warns that, if everything remains the same, “future increases in pension spending will reduce the space for spending in other areas related to ageing (health, long-term care and education) and in non-related areas (such as research and development, defence or housing)”. There will therefore be “difficult trade-offs” to be made, it adds, calling for an increase in the supply of labour “to alleviate future stress on tax revenues and fiscal sustainability”.