Economists and pension fund experts have warned that the Portuguese State will not have enough cash to pay pensions by 2040.
Falling birth rates, Brazilian and Ukrainian immigrants returning to their countries of origin, longer life expectancy and plummeting tax receipts all mean that there simply aren’t enough national insurance contributors to pay the nation’s pensions.
Former PSD finance minister, Bagão Felix and former social security minister, João Cantiga Esteves, currently a lecturer at Lisbon’s ISEG higher institute for management and the economy, warned this week that it will soon be inevitable for the Government to cut the value of state pensions and raise the retirement age beyond 65.
Unlike projections made in previous years, the State Budget for 2012 has made it clear that between 2030 and 2035 Social Security receipts won’t be enough to pay for Portuguese State pensions.
In 2035, for example, national insurance contribution receipts will be little more than €22 billion while expenditure will reach €22.5 billion.