Portugal: no country for old people

Conceição Gesto and her husband had it all planned: they would work hard, live frugally in their modest central Porto apartment, then enjoy retirement travelling the world and spending their savings on the treats they had passed up while raising their daughter. But life took a different turn.

At 60, Gesto not only finds herself living on a drastically reduced pension having been forced by redundancy into early retirement – she and her husband are also rapidly spending their savings, not on holidays but on supporting their separated daughter and two grandchildren.

The Gestos are not unique. They belong to a growing new socio-economic grouping in crisis-stricken Portugal: elderly parents who, after a lifetime of raising children, are once again housing and providing for sons and daughters – and now their families too – following job losses and, as a consequence, homelessness.

“Our generation grew up being told that we must work hard and save hard. We never smoked or drank or went to fancy restaurants. And this is how we end up,” she says.

After 38 years’ service, Gesto receives a monthly pension of €215 instead of the €500 she says she would have got if the printing company, where she worked since the age of 11 hand-sewing book bindings, had not gone under.

Her husband earns the minimum monthly wage of about €560 working in a haberdashery, and her daughter gets less on an unfixed part-time contract as an assistant at a special needs school.

“We could never live on the incomes we have now, and it would be impossible for our daughter to support her family alone. Our savings are keeping us all going,” says Gesto, who pays €340 in rent and says medication for one of her grandchildren costs €50 a month.

Pensioners, who comprise about a fifth of Portugal’s population, have been hard hit by austerity measures as the country struggles to comply with the terms of a €78 billion bailout.

Purchasing power slashed
Scaled-back pensions combined with a higher cost of living driven by VAT hikes have slashed the purchasing power of the elderly. In its next round of cuts, the centre-right government of prime minister Pedro Passos Coelho plans to push the retirement age to 66 and to cut civil service pensions over €600 a month by 10 per cent.

Almost a quarter of over-65s in Portugal are at risk of poverty and/or social exclusion, slightly above the overall country rate, according to the latest Eurostat figures from the European Commission.

With the burden of the economic crisis landing on the doorstep of Portugal’s extended families, it is not unusual to see three generations living under one roof.

“Sometimes I think I’m going mad – I want to run away from them all,” says an only half-joking separated mother of four and grandmother of six, Celeste Magalhães.

At only 45, Magalhães heads a nine-person household in her three-bedroom apartment: over the past year, three of her daughters separated and moved back home, bringing with them four grandchildren aged between two and nine. Magalhães’s own youngest daughter is 13 and lives at home.

Apart from one daughter who works part time in a restaurant, no one else in the family has a job. Magalhães herself worked as a cleaner and nanny for 22 years, but even cleaning jobs are impossible to come by now, she says. With unemployment benefit available only to those who have paid into the social security system, Magalhães is the only one eligible. The household’s total monthly income is €589.

Luckily there is no rent to pay – she was left the apartment in Porto's historical quarter by her father – but she finds it impossible to feed nine people and pay school expenses. The family depends on grocery handouts from the nearby social centre at the Our Lady of Victories parish run by Fr Jardim Moreira, president of the European Anti-Poverty Network.

“This is not the African jungle – this is Porto,” says Fr Moreira when describing the extent of hardship he has seen in his parish.

Malnutrition is common among the 140 local children who attend pre- and after-school activities run by the parochial centre, he says. “But so are cell phones,” he adds drily.

Cutting expenses
Down the street, the bright and comfortable parish-run old people's home has a terrace with a view of the Douro river. Inside sits María Reis (87), who has been trying to find ways of cutting expenses since her son's once-flourishing company folded and he found himself earning the minimum wage. He still contributes to his mother's costs at the home – mostly for nappies and medication – where she pays almost all of her €300 monthly pension.

“I suppose it is true that I should drink more water, and that I’ve been trying not to drink so much. But I haven’t wanted to use more nappies,” she explains, as the psychologist at the home Helena Ferreira gently holds her hand and reassures her that she can have as many as she needs, that the home would never see her go without.

As elderly people such as Reis feel the burden of the crisis, Portugal’s young people are deciding they have had enough. With joblessness among under-25s at 37 per cent compared with the general unemployment rate of just over 17 per cent, youth emigration has surged in recent years, and has now hit the levels of the country’s biggest exodus in the 1960s.

The secretary of state for emigrant communities, José Cesário, has estimated that 240,000 people left Portugal between the start of 2011 and early this year.

However, unlike the poorly educated emigrants of five decades ago, those flying out these days are young, highly skilled graduates – the best-qualified generation in Portugal’s history.

Low birth rate
This, combined with a birth rate that has been below replacement level since the early 1980s, paints a worrying picture. Only 90,000 children were born in Portugal last year, the lowest number in more than a century. By 2050, the country is projected to have more over-60s than any other EU state, and a dramatically shrunken number of taxpaying workers to support them.

Portugal’s future elderly generations may have fewer dependants to support in times of crisis, but they may also find there is no one to support them, in good times or bad.