Retirement will have to be postponed until age 68 to pay pensions, according to CaixaBank Research.

BarcelonaIn a world with fewer births and greater longevity, the demographic challenge facing most advanced economies is imminent. The population structure is changing and increasingly resembles less a pyramid with a broad base made up of young people and a narrow top of older people. Instead, there is now an obelisk, with its foundation eroded by low birth rates and a growing top spurred by increased life expectancy. This is reflected in the dossier. Challenges and policies in the age of longevity, published this Monday by CaixaBank Research, in which the banking entity analyzes through different articles what economic scenario awaits us as the generation of the baby boomers people are beginning to retire en masse. He warns, for example, that in order to finance pensions it will be necessary to raise the retirement age to 68.

This change in silhouette, warns economist Josep Mestres Domènech, means that in 2050 in Spain, for every retiree, there will only be 1.6 people of working age (currently there are 2.6). "This demographic trap in which generations are not renewed will become more pronounced in the coming years," the expert emphasizes. In this context of accelerated aging, the report recalls that the birth rate would be a first lever to counteract this population stagnation. Even so, it admits that future forecasts regarding births are not optimistic and recommends boosting policies.

It must be kept in mind that this demographic pressure will also be felt in public spending and that, according to the publication, without the necessary measures, in the medium term this will lead to a worsening of the public accounts of developed economies. correspond to pensions. Meanwhile, income from contributions of working people will only increase by 1.1 percentage points,

assesses. Specifically, this calculation would be made by applying three-quarters of the increase in life expectancy projected between 2022 and 2050. This would mean that in Spain the legal retirement age would increase from 66.2 The delay in retirement age from 2022 to 68.2 years in this period. According to the expert, a delay in retirement age alone would represent a reduction in pension spending of 0.5 percentage points of GDP in 2050, compared to the baseline scenario of retirement at 67 starting in 2027.

Immigration and Productivity

The CaixaBank Research dossier also highlights the impact of immigration on this demographic decline. Between 2022 and 2024, during a period of rebound due to the post-COVID recovery, nearly 1.2 million new arrivals arrived in Spain. For the coming years, the National Institute of Statistics (INE) forecasts a net influx of 375,000 people per year until 2053. However, it is estimated that the state would need to receive at least one million migrants per year on a sustained basis for three decades to maintain the current dependency ratio (a six-fold increase in the proportion of the population to four-fold increase in the older population). This indicator currently stands at 36% and will rise sharply to 61% by 2050. "It seems very complicated to receive inflows almost three times higher than expected and at the same time provide the population with public services adapted to avoid saturation," the study adds.

Finally, the publication analyzes the extent to which productivity can be another lever to counteract the effect of demographic pressure. In this regard, it predicts that if productivity grows by an average of 1.2% over the next 25 years (instead of the current forecast of 0.8%), pension spending could be reduced by one percentage point of GDP by 2050 and public debt by nearly 20 percentage points compared to the baseline scenario. "It is not unreasonable to aspire to achieve this rate in the medium term, although it is an ambitious goal," concludes CaixaBank Research.