The government will be extending the required years of contributions for full pension eligibility from 41 to 42 years for individuals born in 1976 or later. 

The measure was unveiled by Finance Minister Clyde Caruana during his Budget 2025 speech.  

He said it is part of a broader strategy aimed at balancing the growing demands on the pension fund with long-term sustainability.

Those who start working aged under 23 will not be directly impacted by this measure, as they will have already paid 42 years’ worth of National Insurance contributions by the time they reach the pensionable age. 

But those who, for some reason or other took longer to join the workforce will effectively be required to work an additional year to get a pension. 

Caruana emphasised that the government’s commitment to pensioners has been unwavering over recent years, with the state’s investment in pensions surpassing €400 million annually. 

“Over the past years, we’ve introduced dozens of measures to support pensioners, significantly improving the state of pensions,” Caruana stated, highlighting the government’s determination to honour its obligations to the elderly. 

“This commitment has led to a considerable increase in pension spending, exceeding €400 million.”

Caruana stressed the importance of sustainability to ensure the pension system remains viable for future generations. "

As with any investment, it must be sustainable," he noted, explaining that the increase in contribution years was a recommendation from the Strategic Pensions Group, a body dedicated to safeguarding the pension system’s future.

Caruana said there would be no increases in the retirement age or the social security contribution rate. 

He insisted that steady economic growth and stable job creation will allow the government to fortify the pension system without imposing additional financial burdens on the workforce.