The cut in early pensions through the sustainability factor is once again at the center of retirement accounts in Portugal, especially for those who plan to leave the job market before the legal age and are not covered by special regimes.
In 2026, this cut will be 17.63%, above the 16.9% applied in 2025, according to Lusa calculations based on data on average life expectancy at age 65.
Penalty increases next year
The increase is the result of the evolution of average life expectancy at age 65, an indicator used in calculating the social security factor. The IBGE estimated this value at 20.19 years in the 2023-2025 three-year period, 0.17 years more, or 2.04 months, compared to the previous three-year period.
The sustainability factor applicable to old-age pensions starting in 2026 was set at 0.8237, which corresponds to a 17.63% reduction in the value of the pension in cases where this cut applies, according to .
Who is affected by the cut
This year, the normal retirement age is set at 66 years and nine months. Thus, anyone who retires before this age, without being covered by special regimes or long contributory career rules, may have this cut applied to their retirement.
In addition to this reduction, there is a fine of 0.5% for each month in advance of the legal retirement age. In practice, the greater the distance between the request date and the normal age for accessing the pension, the greater the impact on the final value.
Retirement age rises in 2027
The normal age for accessing old-age retirement will rise to 66 years and 11 months in 2027. The same ordinance justifies this change with the evolution of average life expectancy at age 65 between 2024 and 2025.
This indicator is calculated annually by INE and serves as a reference both to define the normal age for accessing retirement by age and to calculate the sustainability factor applied to the statutory value of pensions under the general regime.
There are cases where the cut does not apply
The system provides for exceptions. One of the situations covers workers who, at the age of 60, have already completed 40 years of contributions. In these cases, there may be no cut due to the social security factor, although a 0.5% fine may still apply for each month in advance.
There is also the regime for very long contributory careers, which allows workers aged 60 or over to retire without penalty, with at least 46 years of deductions and the beginning of contributory activity before the age of 16.
Pandemic came to alleviate the factor
The sustainability factor has seen several fluctuations in recent years. In 2024 it was 15.8%, after being 13.8% in 2023, 14.06% in 2022 and 15.5% in 2021.
The drop observed in 2022 and 2023 was linked to the reduction in average life expectancy during the most critical periods of the covid-19 pandemic. With the resumption of the trend towards increasing longevity, the factor rose again.
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