Portugal is one of the countries that has the legal age for access to a pension indexed to average life expectancy and, according to the “2019 Pensions Overview” of the Organisation for Economic Cooperation and Development (OECD), is also one of the countries where it is estimated that the age for access to retirement will increase the most.
The rise from 65.2 to 67.8 years assumes people start working at 22 and places Portugal in eighth position in the list of countries where it is expected that the pension age for those who are now starting working life will advance further.
At the top of the table is Denmark, where it is expected to increase by nine years (from the current 65 to 74), followed by Italy (from 67.0 to 71.3 years), the Netherlands (from 65.8 to 71.3 years) or Estonia (from 63.3 to 71.0 years).
Although the retirement age is increasing in many countries, as a result of measures that have been taken to adapt the exit from working life to the advancement of average life expectancy, the study points out that this type of measures “will be insufficient” to maintain the balance between the exit from working life and the entry into retirement.
“Taking into account the measures taken, about half of the OECD countries will see the retirement age increase from the current 63.8 years on average to 65.9 years in 2060. This represents half of the gains in life expectancy expected for the same horizon, which means that these measures alone will be insufficient to stabilise the balance between working life and retirement,” says the document.
Over the past 40 years, the number of people over 65 for every 100 of working age has increased from 20 to 31, and it is expected that by 2060 it will have almost doubled to 58, the “Pensions Overview” said.
Portugal, along with Greece, Poland, Korea, Slovakia, Slovenia and Spain, is among the countries where ageing will advance most rapidly.
The working age population is expected to fall 10 percent by 2060, which means an average decline of 0.26 percent per year, the report says, adding that this will “have a significant impact” on pension systems - such as the Portuguese one - that operate on a pay-as-go basis - i.e. where pensions in payment are financed by contributions from those who are working.
In Portugal the replacement rate of pensions for full contributory careers is around 90 percent, which is among the highest among the countries analysed, and well above the OECD average of 59 percent.
The report places Portugal among the 10 percent of countries where the replacement rate will remain stable when compared to those who are now retiring and those who were born in the 1990s.
In 60 percent of countries, the replacement rate (the difference between the last salary and the first pension) is expected to decrease.