Luis Garvía, PhD in Finance, says the utopia of the Social Security pension pot no longer exists: "200 billion in benefits are paid out."

According to the latest Social Security data, more than €10.3 million was allocated to pension payments for 9.4 million Spaniards in July. The average pension was €1,311.9 per month, and €1,445 for retirees (the majority group). This means that "one million pensioners receive two pensions."

This is how Finance Doctor Luis Garvía addressed the delicate situation facing our country's pension system . During a program on LaSexta in which several experts debate and compare the salaries that a worker and a pensioner, for example, a retiree, could receive, Garvía took advantage of his intervention to take a snapshot of a system that is "deficient."

In response to the assertion that "the average retirement pension is lower than the average salary," the Doctor of Finance explains that in Spain we have a "pay-as-you-go system," meaning that what comes in one way goes out the other; what is collected in taxes goes to different items, including pension payments.

So far, so good. The problem is that "until 2009, more was coming into the system than was going out," but "since 2010, less is going out than is coming in," warns Garvía, who adds that "the pension pot that existed then has been gradually emptied." Broadly speaking, "we contribute between 150 and 160 billion euros and 200 billion are paid out in benefits ," figures that have created a gap of such magnitude that it reaches 45 billion euros.

Garvía then concludes that "the pension pot doesn't exist," a statement that contrasts with the predictions of the Ministry of Inclusion, Social Security, and Migration, which estimates that the Reserve Fund will close 2025 with €14 billion, its highest level since 2017.

It should be remembered that in 2024 , the pension contribution deficit rose to 30 billion euros despite the increase in contributions, also a historic high. At that time, the pension system accumulated 48 quarters of income less than it spent on contributory benefits, or in other words, it has been in permanent deficit for 12 years.

Social Security will continue to go into debt in 2025 despite having implemented new contributions to increase income from wages, such as the Intergenerational Equity Mechanism (IEM).

The main objective of this new tax, which went into effect in 2023, is to fill the pension pot to cover the retirements of one of the largest groups of workers in Spain: the baby boomer generation. Thus, although it is defined as "the collection of social security contributions to cover common contingencies such as retirement," the truth is that it is a fixed-term tax that does not improve the collection of future pensions.

"Pensioners of today and those of tomorrow can rest easy," said Elma Saiz , head of Inclusion and Social Security, at the beginning of the year, anticipating potential critics who, like Garvía, claim that the utopia of the pension pot no longer exists.