Deep in recession, Spain now has almost 6 million people out of work and the number of people taking early retirement has risen sharply but new measures will save the social security system €4.5 billion a year when they have taken full effect in 2027.
Under the new measures companies will be penalised for letting older workers go. The government will also raise the minimum amount of contributions a worker must make in order to be eligible for early retirement.
Brussels has recommended that Spain should take additional measures to reinforce its social security system.
The Socialist government reformed pensions in 2011 to phase in a higher retirement age of 67, by 2027, and to increase the number of years of contributions required to be eligible for a state pension. One out of every two Spaniards retires before the current legal age of 65, and the current effective age of retirement is 63.
Minister for Labour, Fatima Banez said, ‘Today early retirement and partial retirement cost the system more than €9 billion a year. When these measures go into effect, we will save half of that amount every year.’