As we have discussed in previous posts, there is a Social Security deficit which we could call “systemic”. Today we will talk about how the Government intends to patch things up in the solution to this serious problem, which affects us today and tomorrow.
The recent Social Security deficit
In 2016, almost €20 billion was drawn down from the “Pension Piggy Bank”. As they say, that one stayed “shivering”, after the plundering of the last few years:
- From the €66 billion accumulated therein in 2011
- To the less than 16 billion left in the Reserve Fund at the end of 2016
We already advanced last December that the numbers were not in for 2017, At this rate of withdrawal, the balance would be exhausted before the end of the year. This is how it has been, The government has had to react, now we will see how.
A loan from the Treasury to the Social Security
This would be the big headline... The government has decided to lend money to the Social Security in order to be able to pay pensions.
In view of the existing deficit, have chosen not to deplete the small remaining balance of the Reserve Fund, but to do so in this way, 10,129 million loan.
It seems that, despite the loan, a greater effort will still have to be made, given that the estimated deficit is around €16.5 billion. This difference will be covered by the Pension Piggy Bank, which will remain at around €10 billion.
Future prospects for social security
All this does not give cause for optimism. Moreover, according to the information we can see in the press, the Executive is inflating the forecast for Social Security revenue. They are including in the Budget estimates of growth for this year of 6.8% in revenue, when up to February the growth is 4%.
Young people are aware that, by their retirement age, public pensions will be much smaller than they are today. For all those who are able to do so, it would be advisable to take out some kind of savings plan to help us supplement that pension.
We work with more than twenty insurance companies, which offer better solvency than many banks. Come and ask us.
