These are the three retirement changes that will take effect as of April 2025

The coming month is full of changes for senior workers close to retirement. As from April 1, the Social Security will introduce a series of significant changes in partial, active and delayed retirement in order to "improve the compatibility of the pension (...) with work, the regulation (...) of access to the pension for highly dangerous activities and to make better use of the resources of the mutual insurance companies in order to recover the health of the workers", according to the Government.

Thus, according to Royal Decree-Law 11/2024, of December 23, certain aspects of the following retirement modalities are reformed to adapt the regulations to current economic and social needs in order to improve the compatibility between retirement pension and work.

Changes in active retirement

Active retirement -a modality that makes it possible to make retirement pension and work compatible for a certain period of time- is a very attractive option for those who do not want to retire from the labor market even if age demands it.

In order to improve the conditions for those who make this decision, the current requirement of having a full career of contributions will be eliminated in order to have access to early retirement. In other words, those workers who meet the minimum contribution period of 15 years or more to access the retirement pension will now also be eligible for it, according to BBVA.

Likewise, the active retirement situation is made compatible with the incentives for delaying the retirement age. "To understand it better, a worker who can and does retire at his ordinary age, if after two years he decides to return to work, in addition to the right to his salary, he will be entitled to a 55% pension that will increase each working year until he can reach 100% in the fifth year", clarifies the Minister of Social Security, Elma Saiz.

Changes in partial retirement

As its name indicates, partial retirement is the formula by which a worker combines part-time employment with the receipt of a pension, the amount of which is reduced in proportion to the reduction in working hours.

In order to be eligible, a person must be hired to complete this reduction in working hours through a relief contract, which may now take place up to three years before the ordinary retirement age (previously it was two years). The hiring of the reliever must be indefinite and full time.

For those who anticipate their access to retirement by more than two years (for example, if they access retirement 3 years earlier), the reduction in working hours of the partial retiree during the first year will be a minimum of 20%, and a maximum of 33%. "It favors (...) the transmission of knowledge among workers, the rejuvenation of the workforce and avoids early exits from the labor market".

As a novelty, workers who have reached the ordinary retirement age will also be allowed to access partial retirement with a reduction in working hours of between 25% and 75% (up to now it was 50%), without the need for a relief contract.

Changes in delayed retirement

With regard to delayed retirement, the new regulation reduces the incentive for delaying the contribution age from 12 to six months as from the second year after reaching the legal retirement age. In other words, the person who avails himself of this modality will receive more pension money for each additional six months worked, and not after 12 months.

"It is a reality that more and more people are choosing to work beyond the legal retirement age (...) We are responding to a reality and taking advantage of senior talent," said Saiz.

Under the new framework, if a person who can retire at 66 years of age decides to continue working until 68 and 7 months, they will receive a 4% increase in their pension for the first year of delay; another 4% for the second year (an additional 2% for each six-month period) and 2% for the additional seven months. This means that, when you finally retire, your pension will be 10% higher.