Portugal closed its 2025 Social Security Financial Stabilization Fund (FEFSS) with 42 billion euros, money that will allow it to continue paying pensions for more than two years in the event that no money comes in. Meanwhile, Spain’s pension piggy bank (which is known as the Social Security Reserve Fund) had 15,267 million (as of March 31, 2026), an amount that is barely enough to pay just over a month of pension payroll.
The Government of Portugal also announced that it would reinforce the fund with another 5.5 billion. The “piggy bank” had grown by around 6,000 million in 2025, with 4,500 million contributed by the State and 1,500 million in profitability (3.92%), according to the press release.
In the case of Spain and if we take into account the latest numbers published by Social Security, pension spending in September rose to 14,498.2 million euros to pay 10,547,417 pensions. That is to say, the money left in the pension pot would be enough to pay for an ordinary month and little else, and would not be enough to pay for a month where there was extraordinary pay like Christmas.
The Spanish fund reached 66,815 million in 2011, but between 2012 and 2019 80,337 million were taken from it to pay pensions and in 2020 and 2021 it remained at 2,138 million, as stated in the Reserve Fund report to the Cortes. From 2023, that piggy bank is filled with the intergenerational equity mechanism (MEI), which is a surcharge that is applied to the payroll of all workers and which contributed 4,356 million in 2025.
This surcharge grows every year and right now it is at 0.9% (of the salary for which it is quoted), where 0.75% is paid by the company and 0.15% by the worker. This will reach 1.2% in 2029, as regulated by the forty-third transitional provision of the General Social Security Law.
The Social Security debt, which grows every year due to State loans, reached 136 billion this past July, an amount that represents 7.8% of GDP and almost nine times more than what is kept in the piggy bank, according to what the Bank of Spain says.
To have a mattress like the Portuguese one, more than 400,000 million would be needed
If we multiply the September payroll by the 14 annual payments, the approximate pension expense would be around 203,000 million euros per year. In this way, if the Government of Spain wanted to be able to have a fund to pay pensions for two years, it would need to have approximately 406,000 million, more than 26 times the last balance of the Spanish fund.
Now, the law does not allow the piggy bank to be touched until 2033. When that year arrives, the Budget Law will set how much can be withdrawn each year for the “financing of contributory pensions”, with a maximum of 0.10% of GDP in 2033 that may rise to 0.91% in 2047, this being the maximum allowed by article 121 of the General Social Security Law.
Even so, the European Commission recalls that pensions in Spain operate as a pay-as-you-go system, where each month’s pensions are paid with what Social Security receives that month, not with what is in the piggy bank, which leaves the system exposed to demographic changes (for example, now with the arrival of baby boomers into retirement).
According to the OECD’s Pensions at a Glance 2025 report, Spain’s fund is at 0.6% of GDP, while the Portuguese fund is at 12.6% and the group of OECD countries that have this system is at 11.4% of their combined GDP. Added to this is that the Spanish piggy bank invests in public debt and in assets of the Official Credit Institute (ICO), which had an average return of 0.0% annually between 2014 and 2024.
Alfonso Muñoz, Social Security official, on the future of pensions: “After 35 years, here we still have a system that has expanded its protection”
De facto couples with children in common will be able to collect the widow’s pension without being registered in a registry and those who were denied it will have one year to request a review.
The OECD also calculates that the worker who earns the average salary and begins his career in Spain today will receive a pension equivalent to 86.3% of his last net salary, while in Portugal it will be 92.7%. Now, the retirement age in Portugal for that worker will be 68 years, while in Spain it is 65 years (67 years if you have less than 38 years and six months of contributions).