In a context of increasing pressure on social protection systems in Europe, a new report warns that the social security model in Spain may not be sustainable in the long term, leading experts to defend profound changes and point out alternatives already applied in other countries.
Over the past 15 years, different Spanish governments have attempted to reform the pension system, at a time when the number of beneficiaries increases and the amounts paid continue to rise. This combination has been aggravating the public expenditure associated with the reforms, according to the digital newspaper.
Among the measures adopted are the increase in the retirement age, the introduction of new financing mechanisms, such as the so-called Intergenerational Equity Mechanism, and penalties for those who choose to retire early. Still, several experts consider that these solutions are not enough.
Report highlights lack of sustainability
A recent study by economist Daniel Lacalle, released through the Atenea platform, concludes that the current Spanish Social Security model may not be viable in the long term.
According to the document, the system is based on a distribution model, in which contributions from active workers finance the pensions of current retirees. This balance depends on the existence of a sufficient number of taxpayers and salaries capable of supporting the system. The problem arises with the aging of the population, the decline in birth rates and the growing pressure on public accounts, factors that are reducing financing capacity.
Growing dependence on the State
According to the report, this evolution has led the system to increasingly depend on state transfers, increased debt and extraordinary mechanisms to balance the books. The data indicates that the number of pensions continues to grow, as does total expenditure, while contribution income does not keep pace.
According to the same source, the study also states that, in mid-2025, the accumulated deficit of the pension system in Spain reached high values, reflecting a structural imbalance that has lasted for decades.
Lack of transparency for workers
Another of the problems highlighted has to do with the lack of clarity for workers. Many contribute for years without knowing exactly how much they will receive in the future or how economic factors and political decisions might affect their retirement.
The report considers that this lack of information makes individual planning difficult and contributes to the perception of uncertainty in relation to the system, as stated by the source cited above. It is in this context that the proposal to look at alternative models arises, with emphasis on the Swedish case.
Example from Sweden
Sweden’s model combines a public component with individual savings mechanisms, spreading risk across multiple financing sources.
On the one hand, there is a public pension based on contributions throughout working life. On the other hand, part of the income is channeled into individual accounts that are invested, allowing a return to be generated over time. In addition, a guaranteed minimum pension is foreseen to ensure protection for those who do not reach certain income levels.
A more balanced system
The main difference with this model is the more direct link between what each worker pays and the amount he or she may receive.
At the same time, the exclusive dependence on future generations to finance current reforms is reduced, distributing the risk and making the system more resilient to demographic aging. The report argues that this diversification contributes to greater financial stability in the system.
Clear information through “about orange”
Another prominent example is the so-called “about orange”, a mechanism used in Sweden that provides workers with regular information about their contribution situation. This document includes data on accumulated value, pension estimates and simulations depending on retirement age, allowing for greater predictability.
According to the study, this transparency facilitates decision-making and brings citizens closer to the functioning of the system.
What it could mean for Portugal
Although the study focuses on Spain, the theme of pension sustainability is common to several European countries, including Portugal, where there are also challenges associated with the aging population. The discussion about possible reforms and alternative models may gain greater relevance in the coming years, as pressures on public social protection systems increase.
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