Spanish economist Gonzalo Bernardos said Spain's pension system will run a deficit of comfortably more than 70 billion euros in 2026, arguing that a reform meant to shore up the system's finances has failed to close the gap.
Bernardos set out his analysis in a series of posts on the social media platform X, tracking recent trends in Social Security spending and revenue. He said the central problem is that spending is rising faster than income, a pattern he argued makes it impossible to bring down the system's deficit.
Bernardos is a professor of economics at the University of Barcelona and a frequent commentator on Spanish television on economic and housing issues.
Reform under Escriva
The reform he referred to was driven during the tenure of Jose Luis Escriva as Spain's Minister of Inclusion, Social Security and Migration, and was intended in part to strengthen the system's revenue and help reduce its deficit. Bernardos said that goal has not been met and that the imbalance will keep growing this year.
Why pension spending keeps climbing
According to Bernardos, three factors are driving the rise in pension spending. First, the number of new pensioners entering the system grows every year. Second, people now retiring receive, on average, higher benefits than those leaving the system as they die.
The third factor, which he described as positive from a social point of view, is that retirees are living longer. That greater longevity means pensions are paid out over more years, adding further to total spending, he said.
The revenue measures meant to help
Bernardos also reviewed the revenue streams that were meant to reinforce the system's finances. Among the extraordinary income sources, he cited the mandatory contribution to the Reserve Fund through the Intergenerational Equity Mechanism, known by its Spanish acronym MEI, which requires employers and workers to pay an additional levy earmarked for the pension reserve pot.
He also pointed to the increase in maximum contribution bases and the creation of a solidarity contribution for higher earners, both measures intended to raise the resources available to fund pensions.
Alongside those extraordinary measures, Bernardos highlighted trends in Social Security contributions linked to the labor market. He noted that the second quarter of 2026 saw a record high in the number of people in employment, which he said should have boosted the system's ordinary income.
He also pointed to wages, saying pay had been expected to rise faster than inflation, but that this did not happen between 2020 and 2025.
Pensions as the main driver of the deficit
Taking all these factors together, Bernardos made a stark forecast for the end of the year, saying the pension system's deficit "will comfortably exceed 70,000 million euros" in 2026.
He went further, arguing that Social Security's imbalance will be "the main cause of the public deficit" in 2026. To illustrate the weight he attributes to pensions within the public accounts, he set out a hypothetical scenario: if the pension system's deficit did not exist, he calculated, the public sector as a whole would post a surplus of around 1.5% of gross domestic product.
Bernardos concluded that the extra revenue raised through the various measures adopted has not been enough to offset the growth in spending. In his view, the reform has not managed to reduce the system's deficit, largely because of the rising number of pensioners, the size of new pensions and the growing number of years over which they are paid.
