Economics in a picture

The statutory retirement age in Portugal, designated as “normal retirement age”, depends on the average life expectancy at the age of 65. According to the current legislation nearly two-thirds of the longevity gains (with a two-year lag) are translated into an increase in the retirement age. Between 2015 and 2018 the statutory age increased by four months. However, in practice, the actual increase of the retirement age was higher (about one year) which may also have resulted from the more restrictive scheme for early retirement pensions.

Until 2070, assuming that current rules are maintained, the average longevity gains of nearly five years projected by Eurostat result in a three-year increase in the normal retirement age. In the flexible regime of “personal age” of retirement, i.e., in the case of individuals with a contributory record of at least 40 years at the age of 60, that now in general may retire at the age of 65, the increase in the personal retirement age due to the longevity gains will be halved: 1.5 years more until 2070. Therefore, the upward trend in the actual retirement age shall remain in the future, with a positive contribution to the evolution of the labour force.

For further details see Box 1 “Effect of the increasing retirement age on labour force developments in Portugal” of the Special Issue “Demographic changes and labour supply in Portugal” published in the Economic Bulletin of Banco de Portugal, June 2019.

Prepared by Vanda Geraldes da Cunha. The analyses, opinions and findings expressed above represent the views of the author and not necessarily those of Banco de Portugal or the Eurosystem.

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