The Deco association has highlighted the urgent need for retirement savings in Portugal, coinciding with World Savings Day. They emphasized that “saving for retirement is increasingly urgent as life expectancy continues to rise, while pension values decrease.”
With State pensions declining, Deco stressed the necessity for Portuguese citizens to alter their financial planning and the creation of new social protection policies. Despite pensions experiencing a maximum increase of 3.85% this year, per legal adjustment scales, recent projections from the European Commission suggest the “replacement rate of pensions in Portugal will drastically drop.”
Citing the Ageing Report 2024, Deco noted that “the national average pension is expected to decrease from 69.4% of the last salary to 38.5% in 2050, should no restructurations be made to the Social Security system.”
Hence, they urged that planning for retirement must be a lifelong goal, beginning when one enters the job market, to ensure a dignified standard of living comparable to that during active employment. Deco advocates for retirement savings incorporating “progressive tax incentives, transparent products, and accessible financial education for all ages.”
Transforming “fear of the future into a culture of preparation and security” is essential, according to Deco, which stresses that many Portuguese lack complementary savings and are unaware of how their future pension operates.
The association’s data shows that “retired households still have, on average, four active credits” worth approximately 20,000 euros, with credit card debts of around 6,000 euros.
Deco revealed that the monthly payments total roughly 680 euros, compared to an average net income of 1,150 euros, representing a “60% effort rate, significantly above the recommended limit of 35%,” highlighting the “high financial vulnerability of those reaching retirement without personal savings.”
Deco calls for the implementation of financial literacy programs, future protection measures, and providing “independent support” to guide choices in complementary savings and financial products, “without conflicts of interest.”
The association also urged for “progressive tax incentives” across all income levels, simplifying savings access, promoting “simple, clear, and transparent savings products without hidden fees,” and developing “financial inclusion policies.”
They also appealed for reduced tax burden on time deposits and called for “awareness campaigns explaining the importance of saving early, using real and accessible examples.”
