But the truth is that, even waiting for more years to try to avoid deep cuts in the benefit that will be granted until the end of life, the average value of the old-age pension continues to be mediocre in comparative terms: for example, it is 20% lower than the value of the national minimum wage (SMN), data from the BdP show.
Worse: half of old-age pensioners (23% of the Portuguese population, around 1.25 million people), earn less than 426 euros per month in pension. Here, the comparison is even worse: 426 euros is half (51%) of last year’s SMN value.
This value of the pension, often called “misery”, is, as we know, and in many cases, supplemented with other benefits, such as the Solidarity Supplement for the Elderly (CSI) and other non-contributory support, which have been extremely effective in preventing thousands and thousands of elderly people from living in absolute poverty in Portugal.
Second the study prepared by BdP economists Cláudia Braz, Sharmin Sazedj and Lara Wemans, last year, “the average retirement age of new old-age pensioners has been increasing consistently since 2018, which, to a large extent, should reflect the impact of the penalty mechanisms applicable to early retirement and the voluntary postponement of leaving the labor market”.
This system of disincentives has allowed an increase in the value of the pension, avoiding cuts, which in some cases could reach 20% or more in the pension awarded.
“In 2024, the average retirement age was 65.4 years, compared to a legal age of 66.3 years. Since 2018, the average retirement age has increased by around eight and a half months, in a context in which the legal retirement age, indexed to the evolution of average life expectancy at 65 years, has remained relatively stable”, finds the new research.
However, even with a pronounced extension of the average retirement age for old age (it went from around 57 years in 2018 to 65.4 years in 2024), the average monthly pension was well below the national reference which is the minimum wage, it was “around 645 euros, close to 80% of the national minimum wage (SMN)” which, remember, was set at 820 gross euros per month, in 2024. This year, it rose to 870 euros.
“A high dispersion is observed, with half of pensioners receiving less than 462 euros“, while only 5% of pensioners “receive more than 1685 euros (about twice the SMN)”, says the study.
“The majority of pensioners earn values significantly lower than the average, reflecting an asymmetrical distribution and concentrated at low levels”, the authors note.
Furthermore, “differences by gender are equally significant. Pensions awarded to women show less variability and are, on average, at lower levels. In 2024, the average female pension was 490 euros, around 40% below the amount received by men. This difference reduces to 28% if one considers, for the same universe of pensioners, the sum of old-age and survivors’ pensions”.
Statistically, women live longer than men, so they tend to benefit more from survivor benefits (widowhood).
The same study says that “the analysis by age group reveals lower pensions on average in the older age groups”, that is, the older the pensioners are, the more they reflect poorer contributory careers, marked by low wages throughout their lives.
“In 2024, pensioners under 65 years of age had an average pension of around 770 euros”, but when you move up the age scale, the value of the pension plummets. This value “gradually decreases to 537 euros among pensioners aged 80 or over”.
“This profile should be associated with an increase in the duration of contributory careers and the declared income of new pensioners”, says the BdP.
“In geographical terms, the value of the pension is, on average, higher for pensioners residing in the districts of Lisbon, Setúbal and Porto and lower in the districts of northern interior of the countryreflecting, among other factors, existing inequalities in terms of wages.”
According to the central bank governed by Álvaro Santos Pereira, in Portugal, “there are currently around 2.5 million old-age pensioners from public schemes (23% of the total population), of which 2 million belong to the Social Security system and 440 thousand to the Caixa Geral de Aposentações (CGA), a subsystem closed to new registrations that covers public servants hired until the end of 2005”.
“Within the scope of Social Security, several regimes coexist, although the vast majority of old-age pensioners (97%) fall under the general contributory regime”, which was the universe considered in this study from the “Policies under analysis” series.