Most of the rules for those intending to retire in 2022 remain unchanged from 2021, but as of today there is a new legal retirement age and changes in the cuts to apply to some early retirements.
In turn, the majority of current pensioners will have pension increases in line with inflation, and extraordinary increases are not foreseen, as happened in previous years, due to the lead of the State Budget in parliament.
Here are some key points about pensions in 2022:
*** Retirement age at 66 years and seven months ***
The legal age for accessing retirement increases by one month in 2022 compared to 2021, rising to 66 years and seven months.
However, in 2023, the retirement age will, for the first time, fall and will be 66 years and four months. The drop is due to the reduction in average life expectancy associated with mortality related to the Covid-19 pandemic.
To apply for retirement, in addition to the required legal age (66 years and seven months in 2022), the concept of “personal age” for accessing retirement must be taken into account.
The personal retirement age results from the reduction, compared to the statutory retirement age, of four months for each year of service that the person has more than 40 years of career.
For example, if a person has 43 years of discounts, they can deduct 12 months from the normal retirement age.
*** Sustainability factor ***
The sustainability factor, which is a cut applied to some early pensions, will drop from the 15,54% that were applied in 2021 to 14,06% in 2022.
That is, whoever retires before the age of 66 years and seven months in 2022 (or before their personal retirement age) will have a 14,06% cut in their pension value.
This cut by the sustainability factor does not apply, however, in the cases of very long contributory careers and those who, at the age of 60, had already completed at least 40 years of career.
The decline in the sustainability factor is associated with the average life expectancy at age 65, which fell four months to 19,35 years in the 2019-2021 triennium, due to mortality associated with the Covid-19 pandemic.
*** Penalty of 0,5% per year remains ***
Early retirements are also subject to a cut of 0,5% for each month of anticipation against the statutory retirement age (66 years and seven months in 2022) or against the “personal age” of retirement.
*** Pension increases ***
The automatic update of pensions in 2022 will result in increases between 1% for the lowest value and 0,24% for the highest.
That is, pensions with a value equal to or less than twice the Social Support Index (IAS), that is, 886 euros, have an increase of 1% in 2022.
Pensions between 886 euros and 2.659,2 euros (an amount equivalent to six times the IAS) increased 0,49% and pensions with a higher value rose 0,24%.
For the time being, no extraordinary increase in pensions is foreseen in 2022, as the State Budget for this year ended up being rejected by parliament.
*** Social Support Index increases ***
In 2022, the Social Support Index (IAS) is updated from 438,81 euros to 443,20 euros, an increase of 4,39 euros compared to 2021.
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