Spain’s far-right Vox unveils plans to privatise public pension system
Under proposals by Spain’s hard-right party and possible next coalition government member, pensioners would need a private top-up to their state pension.
Spain’s hard-right Vox has outlined plans to privatise the public pension system, arguing that system is unsustainable ahead of a generation of workers set to retire in the near-future.
The party could plausibly become a coalition partner in future right-wing government, meaning it may well incorporate the idea into any future coalition arrangement from within Spain’s right-wing bloc.
With Spaniards heading to the polls in a snap general election on November 29th, the country’s right-wing opposition parties and potential members of the next government (Vox along with the centre-right PP) are now having their policies put under the spotlight.
READ ALSO: How good are pensions in Spain compared to the rest of Europe?
Now Vox is beginning to reveal its intentions should the party, as the polls suggest is likely, form a government with the PP.
In an interview, Vox MP José María Figaredo opened the door to the privatisation of pensions, something he considers to be a “zombie” system.
“The pension system is a zombie. They’ve run it into the ground,” he said. “In 1998, the Toledo Pact commission accurately identified the system’s weaknesses, and in nearly 30 years no corrective measures have been implemented.”
Figaredo instead proposed a “structural reform towards a mixed model that combines a pay-as-you-go system with individual capitalisation, as other European countries have done successfully.”
This mixed model would see the state contribute a portion and citizens would need to have a private scheme or savings accounts to cover what has hitherto public money.
The hard-right representative also highlighted what he sees as the major economic challenges facing the country in the future: “Pension expenditure, debt, wage costs and energy dependence will be major constraints in the future”.
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In 2026, around 9.5 million people will be receiving a state pension in Spain.
The system is based on a pay-as-you-go model, whereby workers’ contributions finance current benefits.
It includes retirement pensions, permanent disability pensions, widows’ pensions, orphans’ pensions and non-contributory schemes for people on low incomes. T
The average pension stands at €1,374.6 per month, based on figures updated to September this year.
With a generation of workers set for retirement in Spain, there have long been concerns about how Spain’s public pension system will hold up in the future.
This comes as Spain stares down a demographic crisis in the future, with an increasingly ageing population and a welfare system dependent on migration to keep afloat.
Spain will need to incorporate 2.4 million people into the labour market over the next decade to maintain economic productivity and prop up the pensions system, a 2025 report revealed.
Current migration trends suggest that almost all of these jobs will be filled by migrants due to demographic ageing among native Spaniards, making migrants “essential” to meet the demand, experts say.
READ ALSO: Will there be no public pensions in Spain in the future?
