Freepik
The 2024 AGO REPORT REPORT REPORT leaves us some signs of concern about the demographic imbalance of developed economies, including Portugal.
The European Commission foresees that by 2050 the Portuguese pensions will be much lower than today, valid only 39% of the last salary for someone who retires from now 25 years from now. It is a cut of 33 percentage points compared to what a year ago the European Commission projected to 2025 (about 72%) and there seems to be no obvious or immediate solution.
The sustainability of social security will be questioned over the coming decades, as it is assisting an increasing aging of the Portuguese population. If in 2025 it is estimated that there are 195 taxpayers for every 100 pensioners, in 2050 there will be only 126. That is, there will be fewer and fewer contributors for each elderly, calling for the financing of social security and pensions. There are mechanisms such as the factor of social sustainability, which indexes the age of reform to the average life expectancy of the Portuguese population, however it may prove insufficient for such a sharp aging of the population.
In general terms, the combination of factors such as population aging, low birth rate and increased average life expectancy is a risk for pension financing or, if we want, for the sustainability of social security. It will be inevitable that the pensions are increasingly lower, in relation to the retired’s last salary. This new reality may have a dramatic impact on the living conditions of the elderly population.
- The facts seen to the magnifying glass by André Pinção Lucas e Juliano Ventura – A partnership of the postcard with the Institute
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