ECO had already calculated that this would be the case, based on average life expectancy data released by the National Statistics Institute (INE). And the government has now confirmed this, in an ordinance published in the Official Gazette. The diploma also confirms that the cut in the social security factor applied to early retirement will rise to 16.93% next year.

“In view of the evolution of the average life expectancy at age 65 observed between 2023 (19.75) and 2024 (20.02), in the application of the formula provided for in § 3 of article 20 of Decree-Law no. /2007, on May 10, the normal age for accessing the pension in 2026 is 66 years and nine months", reads the ordinance signed by the Secretary of State for Social Security, Jorge Campino.

Until 2013, the normal retirement age was 65. In 2014, it increased to 66 years, and, from then on, it began to be updated in line with the gains in average life expectancy at 65 years.

For example, between 2019 and 2020, the pension access age plateaued at 66 years and five months, as a result of a very slight increase in average life expectancy. Due to the mortality caused by Covid-19, the retirement age was reduced, unprecedentedly, in 2023, to 66 years and four months. In 2025, it will rise to 66 years and seven months. And in 2026 it will get worse again to 66 years and nine months.

It should be noted, however, that for pensioners with more than 40 years of contributions, the “personal retirement age” is applied, that is, a four-month discount is provided for in relation to the normal age of access to the pension for each discount that the worker has above 40.

Early pensions penalised

The ordinance also confirms what the cut in the sustainability factor applied to early retirements will be in 2025: ECO had already calculated it, and the Government now officially indicates that it will be 16.83%. During this year, this cut was 15.8%.

“Considering the average life expectancy indicator at 65 years old, verified in 2000 (16.63) and in 2024 (20.02), the sustainability factor applicable to old-age pensions starting in 2025 is 0.8307”, highlights the diploma.

By law, the sustainability factor is calculated based on the relationship between the average life expectancy at age 65 in 2000 (16.63 years) and the average life expectancy in the year before the start of the pension, that is, in 2024 for whoever retires next year.

This is not, however, the only cut applied to those who retire early. Most early pensions are cut by 0.5% each month in advance of the legal retirement age.

Still, there are exceptions to these penalties. For example, Portuguese people who request early retirement at the age of 60, having at least 48 years of deductions, or who request it at the age of 60, if they have 46 years of contributions and if they started their career at the age of 16 or in younger people are not targets for cuts.

The same “relief” is applied to Portuguese professionals considered to be rapidly exhausted, and the list of professions considered for this purpose is, at the moment, being analyzed in the Social Concertation.

If the Portuguese request early retirement at age 60 with 40 discounts, they are exempt from the sustainability factor but continue to suffer a 0.5% cut for each month in advance of their retirement age.