Spain implements pension reforms and retirement age increases

Spain is implementing several structural changes to its pension and public sector systems. Starting January 1, 2027, the standard retirement age will rise to 67 for individuals who have not contributed for at least 38 years and six months. Those with longer contribution histories may still retire at 65 without pension reductions.

To strengthen the Social Security Reserve Fund, the Intergenerational Equity Mechanism (MEI) will increase to 1% of the contribution base on January 1, 2027. This increase will be split between employers (0.83%) and workers (0.17%).

Additionally, a new flexible retirement option for the self-employed (autónomos) allows individuals to receive up to 25% of their pension while continuing to work. Meanwhile, public employees are set to receive a 4.5% salary increase in 2027, part of a multi-year agreement between the Ministry of Public Function and unions.

There is also ongoing tension regarding pension penalties for long-term workers who retire early due to health or physical exhaustion, with advocacy groups pushing for the removal of reduction coefficients for those with over 40 years of contributions.