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Demographic dependency rate will increase to 53.7% in 2050 due to population aging, and more than 6 million new workers affiliated to the Spanish Social Security system will be needed to achieve a zero deficit

The demographic transformation that Spain is undergoing, with the country’s population gradually aging and the baby boomers approaching retirement age, has a direct impact on the pension system. Based on forecasts from the Spanish Statistical Office (INE) and Social Security (INSS), the weight of active people between 16 and 64 years of age, inclusive, is expected to fall from 65% in 2022 to 57% in 2050, while the population over 64 years of age is expected to increase from 20% in 2022 to 30% in 2050. This population trend will bring with it a significant rise in the demographic dependency ratio, i.e., the number of people over the age of 64 years compared to the total working age population. By 2022, this rate of demographic reliance will have increased from 31% in 2022 to 53.7% in 2050. This demographic outlook worsens the financial situation of the pension system in Spain which is already in deficit. Currently, 3.78 million more people affiliated to the Spanish Social Security are needed to reach a zero deficit—that is, more than the total number of unemployed people in December 2022. Given the expected demographic changes in the country, more than 6 million extra contributors would be needed in 2050 to achieve a financially sustainable pension system, i.e. without a deficit.