Spain’s gradual pension reform, introduced in 2013, reaches its final stage at the turn of the year. From 1 January 2027, the retirement age of 67 will apply in full. At the same time, pensions are set for their largest increase in several years. For the many foreign residents who work or have worked in Spain, the changes are worth a close look.
Spain Expat Press Editorial Team
Retirement age: 67, or 65 with a long contribution record
After almost fifteen years of step-by-step increases, the final stage has been reached. From 2027, the standard retirement age will be 67. Only those who have paid at least 38 years and six months of contributions into the Spanish social security system (Seguridad Social) will still be able to retire at 65 without a reduction.
By comparison, in 2026 the standard retirement age was 66 years and ten months, and 38 years and three months of contributions were enough to retire at 65.
How many years for a full pension?
From 2027, a full pension, equal to 100 per cent of the calculation base, will require 37 years of contributions, six months more than at present. The minimum contribution period remains 15 years, which entitles the claimant to 50 per cent of the calculation base. Someone with 20 years of contributions will receive around 61 per cent in 2027, rising to just over 84 per cent with 30 years.
New calculation method: the system picks the better option
Since 2026, pensions can be calculated in two ways. The traditional method is based on the last 25 years of contributions. The new method covers a slightly longer period but excludes the worst months. This mainly benefits people with gaps in their working lives or lower earnings shortly before retirement. Claimants do not need to apply for it: the social security system automatically uses whichever method produces the higher pension.
Early retirement
Early retirement will also be linked to the new retirement age. Those who choose to stop working early may retire up to two years before the standard age, meaning no earlier than 65, or 63 with at least 38.5 years of contributions. Those who leave work involuntarily, for example after being made redundant, may retire up to four years early, meaning no earlier than 63, or 61 with a long contribution record. In both cases, the pension is permanently reduced.
Higher contributions for employees and the self-employed
To shore up the pension system, a supplementary contribution known as the Mecanismo de Equidad Intergeneracionalwill rise to a total of 1 per cent of salary in 2027. Employers pay most of it, while the self-employed (autónomos) pay the full rate themselves. The levy will rise further, to 1.2 per cent, by 2029. High earners will also pay a higher solidarity contribution on income above the maximum contribution base.
Pension increase: expected to be around 3.5 per cent
There is good news for those already receiving a Spanish pension. Pensions are automatically uprated each year in line with average inflation from December to November. Because of high inflation this autumn, experts expect an increase of around 3.5 per cent in January 2027, which would be the largest rise since 2024. Minimum pensions and non-contributory pensions are expected to rise slightly more.
The exact figure will only be known once the National Statistics Institute (INE) publishes its provisional November inflation figure on 27 November, with the final figure following on 15 December. The general election on 29 November will not affect the increase, as it is required by law and applies even without a new budget.
What about foreigners who have worked in Spain?
Foreign workers who have paid into the Spanish system are entitled to a Spanish pension under the same rules as Spaniards, provided they meet the requirements. Many, however, have also worked in other countries, and what happens then depends on where those contributions were made.
For contributions made in another EU country, in Norway, Iceland, Liechtenstein or Switzerland, European rules apply. Contribution periods from all these countries are added together to determine whether the minimum contribution period has been met. Someone who has worked ten years in Spain and twenty in Germany, for example, would meet Spain’s 15-year minimum. Each country, however, pays only the share of the pension that corresponds to the entitlement earned there, so the claimant ends up with several partial pensions. The claim is usually made in the country of residence and is then passed on to the other countries.
Spain also has social security agreements with many countries outside the EU, including the United Kingdom, which continues to coordinate pensions with the EU after Brexit. These agreements generally allow contribution periods to be combined in a similar way. Where no agreement exists, only contributions paid in Spain count towards a Spanish pension.
Each country applies its own retirement age, and Spain’s special rules for long contribution records do not apply to pensions paid by other countries. Those who receive only a foreign pension and live in Spain are not affected by the Spanish changes, as their pension continues to follow the rules of the country that pays it.
Tip: check your contribution record
Anyone planning to retire in the coming years should check their Spanish contribution record (informe de vida laboral), which can be downloaded from the Seguridad Social website along with a pension simulation. Those with contributions in more than one country should seek advice, either from the Seguridad Social or from the pension authority of the other country.
