GENERICO.ruEconomicsThe country of 14 pensions: how people live in the state with the most generous old-age payments

The country of 14 pensions: how people live in the state with the most generous old-age payments

In Spain, older people receive the maximum pension on the planet

The most generous pensions in the world are paid in Spain. This is the result of an authoritative international study that examined pension payments in many countries around the world. Currently, Spain, an industrial country with one of the largest economies in Western Europe, is experiencing serious systemic difficulties: colossal public debt, high unemployment, inflation. But at the same time, the maximum payments that local pensioners can receive reach up to €3,572 or, translated into rubles, up to 352,660 per month, according to data from Money Mail and the Aon pension fund. For our elderly, such an amount is a fortune, which few people can receive in a year. A resident of Spain spoke about the pension system there, the incomes and expenses of elderly Europeans.

In Spain, older people receive the maximum pension on the planet Photo: unsplash.com

According to the results of the study, Spanish pensioners are the wealthiest. Their pensions can exceed €3.5 thousand per month. In second place is the USA, in third place is Germany.

Everything is clear with the maximum payments: for Russian pensioners this is an exorbitant amount. But how much do older Spaniards receive from the state on average?

The insurance pension in Spain has increased since January 1, 2024. The minimum payment is €636 per month, and the average is €1250.7 (as of February 2024). The average old-age pension is €1,437.1, and the average pension of a single widower pensioner is only €893.1 per month.

At the same time, the size of the pension varies depending on the region of the country: last year, the smallest average pension was for residents of Galicia – €1169.07 per month, and the largest – in the Basque Country, €1683.6.

In addition to the old age pension, a person can receive other types of pension benefits. For example, for disability. Disabled people and people with any disability group are entitled to a payment of €948. Disabled pensioners receive a supplement to their old-age pension of €316 euros per month. There is also a survivor's pension. Its size in Spain is €648.

According to Pyotr Shcherbachenko, an associate professor at the Financial University under the Government of the Russian Federation, the size of a pension in Spain depends on the length of service, the salary received and working conditions.

“Pensions in Spain are regulated by the Law on Social Security.” It should be noted that there is an opportunity to retire early. However, if a resident of Spain quit of his own free will or was on the labor exchange for more than 6 months in a row, then his pension is reduced by 7%,” he says.

Financial expert Danila Kobtsev notes that work experience plays a very important role in calculating Spanish pension payments.

“If the experience is less than 15 years, the amount of payments is about 50% of the salary, 25 years of experience – about €1 thousand ., who have worked for more than 35 years, the benefit increases by 2% every year,” continues the MK interlocutor.

The retirement age in Spain has been rising regularly since 2013 and will be 67 by 2027. This is due to the high debt burden of the state; there are also a lot of centenarians in the country. In 2024, you can retire in Spain at 66 years and 6 months, with 38 years of work experience. Only if these two conditions are met can Spanish citizens count on a full state pension payment. It is possible to retire earlier – at 65, but only if your work experience in Spain exceeds 38 years.

“For comparison, in 2023, Spaniards could retire after 37 years of service at the age of 66 years and 4 months. A resident of the country can receive an old-age pension if he has 15 years of work experience in Spain and reaches the age of over 67 years, plus two years before retirement he must work in Spain,” emphasizes Svetlana, Candidate of Economic Sciences, Associate Professor of the Department of Institutional Economics at the IEF State University of Economics Sazanova.

The social insurance fund in the country, from which the pension is deducted, is formed through social insurance taxes – every Spaniard monthly deducts 6.35% of wages in favor of a future pension.

At the same time, in Spain, when calculating payments, a replacement rate is used, that is, a pensioner can qualify for a pension in the amount of 50–100% of wages. On average this ratio is 80%. For the calculation, the employee’s average income per year for the last 15 years is taken: the first 13 years – adjusted for inflation, the last 2 years – without this adjustment. 50% of the average salary is received by those whose work experience is 15 years.

Well, the higher the length of service, the closer the pension is to 100% of the salary, but if a person often quit “of his own free will,” then his pension will be reduced. The payment is calculated for the year and is paid not 12, but 14 times a year (13th time before the summer holiday season; 14th time before Christmas).

The state supports pensioners and provides them with benefits and allowances at different levels. For example, older Spaniards are entitled to discounts on medicines – up to 90% of their cost, discount cards to grocery stores and supermarkets, as well as the opportunity to visit public museums and some private ones for free. In addition, pensioners in all regions of the country are given a discount on public transport in the amount of 50-90%. Sports centers also provide discounts, and universities invite you to 3-5 year educational programs with a tuition fee of €300 per year. The most popular areas are foreign languages, art, philosophy and economics.

Photo: unsplash.com

The state railway company gives pensioners discounts on tickets in the amount of 25-50% of their cost, and theaters and cinemas – in the amount of 10-50%. Medical care (state) for pensioners is also free.

Candidate of Economic Sciences, psychologist Ekaterina Catalina says that older Spaniards are actively engaged in self-education.

“Various events and courses are organized for them to study foreign languages, literature, and philosophy,” she notes. – In general, Spain is a country of positive and active people. With retirement, many of its residents feel more freedom and actively spend their time, communicate, learn new things and enjoy their vacation.”

Despite Despite all the “carrots” from the authorities in the form of benefits, discounts and other privileges, it cannot be said that older Spaniards are basking in luxury. After all the obligatory payments, not everyone has “extra” money left.

As a rule, 45-50% of the pension goes to paying rent or a mortgage, but if you own your home, then €160-200 euros per month will be spent on paying utility bills and the Internet. Property tax varies by region of the country and is about 1% per year. With a housing cost of up to €200 thousand, this will amount to €2 thousand per year or €167 per month.

Renting a 50-meter apartment in Madrid will cost €1.6 thousand per month, and the same apartments in provincial Extremadura – €325. Costs for a car excluding gasoline (only insurance and maintenance) will range from €300 to €1 thousand per year. A public transport ticket will cost €55-70 per month.

The cost of the food basket in Spain increased in 2024 to €350-370 per month. This is, of course, an average bill. State healthcare is free, but only for those who have made contributions from work to the social insurance fund, but an insurance policy in a private clinic will cost from €50 to €100 per month.

An analysis of the cost of living in Spain, judging by open source data, shows that a pensioner needs at least €900 per month, provided that he lives in his own modest home and does not often buy modest clothes. Renting a simple home or a mortgage will add another €400-500 per month to expenses.

Experts emphasize that older citizens in Spain need to spend their budget wisely if they have not paid off their mortgage before retirement, especially if their monthly payment from the state is at a level close to average.

“MK” contacted our compatriot Victoria, whose grandmother has lived in Barcelona for many years and asked her to tell us what it is like in practice to be a pensioner in Spain.

Photo: unsplash.com

– Both men and women here retire at 67, but if you work for more than 38 years, then you can at 65. Svetlana Vladimirovna, my grandmother, is now 86 years old.

– Approximately €627, but the payment greatly depends on the pensioner himself, or rather on the percentage of his salary that he contributed to social security during his working time, as well as on his salary in general. For example, a grandmother receives more than €1.2 thousand since she is a widow. But my father will receive more than €2 thousand, because his salary is higher.

– About €450 per month. But the amount may vary. You have to spend more in the winter (heating and electricity are expensive), less in the summer.

– Depends on the family situation. Roughly speaking, if my grandmother didn’t have children, she would have to hire a nurse, and then it would be difficult. True, such situations that you have to count “pesetas” until the end of the month rarely happen. But sometimes retirees have to switch to saving mode. For example, sometimes in winter people stop using heating (hence fires in houses, because the stove is used) in order to spend less.

– Most medicines for pensioners are free, or sold at very low price. There are discounts on public transport. Museums and other cultural institutions are free. Social assistance, if you don’t have enough money at all, pays all the bills. There is also a law in the country according to which a pensioner is assigned an employee who helps around the house for 3-4 hours a day.

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