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Workers in Spain who choose to retire early this year could lose up to €400 more from their monthly pension than they expected.

 

The change affects people who have paid the highest level of contributions into Spain’s Social Security system and who want to take voluntary early retirement. If they retire two years before the official retirement age, their pension could be cut by as much as €705 from the current maximum of €3,359 per month.

 

Under the previous system, the reduction would have been around €305. This means some people will lose roughly €400 more each month than they had planned for.

 

The reason is that from January 1, without any major public announcement, Social Security removed a special transitional rule that was due to remain in place until 2033. This rule protected certain higher earning workers from large penalties if they retired early. In some cases, it reduced the cuts to their pensions to a third of what other workers faced.

 

Now, instead of a reduction of 9.1% for some workers, Social Security is applying a 21% cut for those who retire two years early.

 

As a result, the pension paid to someone affected cannot be more than €2,654 per month. This is a significant drop for workers who have been contributing based on annual salaries above €61,200.

 

The decision is linked to a pension reform introduced in 2022, the aim of which was to discourage people from retiring early. It changed the way reductions are calculated so that the penalty is applied directly to the pension amount rather than to the contribution base. This has a greater impact on higher earners.

 

Although the softer transitional system was meant to last for ten years, only two years have passed before it was effectively withdrawn. Social Security argues that maximum pensions have increased enough in recent years to balance out the difference, meaning the final pension amount is similar to what someone might have received under the old rules in 2021.

 

The possibility that rising maximum pensions could cancel out the benefit of the softer reductions was written into the rules. However, experts and trade unions say this detail was not clearly communicated and has come as a surprise to many professionals and workers.

 

Social Security claims it is simply applying the law as it stands, although it admits the issue is being reviewed internally.

 

José Ramón Mínguez, a labour law specialist and former senior Social Security official, says reforms like this are often introduced quietly without enough public explanation. He points out that the change only affects voluntary early retirement and says each case should be studied carefully. However, he believes the government should have been more transparent.

 

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