Spanish pension benefits 2012

Update following Spanish government changes to pensions

We published a guide some time ago called Spanish pension benefits.  While much of the advice contained within it still holds true, there have been some important changes which have watered down Spain's pension rights to save the government money.  Basically the retirement age has been raised and you will have to contribute to the system longer to achieve the same benefits.

First of all we must make clear that Advoco does not provide any services with respect to pensions.  We get a number of queries each month asking for advice about what pensions can be expected under different circumstances or asking whether it is worth carrying on working to obtain more pension rights.  We provide some information on the website as a service but cannot provide forecasts and advice specific to individual histories and situation.  Please direct these kinds of questions to the social security office rather than Advoco.

There are also much better places to obtain information about Spanish pensions on the web, for example British people should go to the Foreign Office's UK in Spain website which has this guide:

Pension entitlements in Spain

Recent changes

It has been widely reported that the retirement age has been increased to 67 years old.  This is true but it is also more complicated as the increase from 65 is being staggered over a 14 year period starting next year all the way out to 2027.  The retirement age will increase by around a month and a half every year from 2013 so that for example, by 2018, the retirement age will be 65.5.  You would have to be around 50 today to fell the full effects of the change i.e. retire at 67.

In fact there are exceptions.  Anyone who has made the maximum years of contributions (38.5) will be able to retire at age 65 whatever the year of retirement.  Those who have made 37 years history will be able to retire on a full state pension but will have to wait until 67 if the retire in 2027 or later.

Anyone delaying their retirement beyond 67 and contributing further will get a 3% bonus on their pension for each additional year.

Mothers get two additional years of contribution history credited to their account automatically.

There has also been a big rise in the minimum period that someone must contribute into the system to get a pension.  This used to be 15 years and is now rising to 25 years.  Again the increase is staggered, this time over a ten year period with each extra year adding another year to the minimum.  So if you are retiring in 5 years time and have been contributing into the system the minimum will be 20 years.  If you are employed or self-employed in Spain and paying social security you are in the system.

This minimum period of 15 - 25 years is not so clear-cut for foreigners who have also contributed to pensions systems in other EU countries.  This is because there is a general rule that you can combine your pension contribution records across countries.  It is complicated however and not something Advoco can advise you on.  Try the link above to UK in Spain website.