The retirement age will no longer be set at 65 and in future will depend on the sustainability of the social security system under new plans to be discussed on May 2 at a meeting of Portuguese government ministers.

Pedro Passos Coelho’s government has pledged to the EU-IMF-ECB troika that it will cut €4.7bn from public spending between 2014 and 2016. It is expected to adopt a set of sweeping measures to reduce the deficit to 5.5 per cent of GDP this year, 4 per cent in 2014 and 2.5 per cent the following year.

The state is preparing to cut 20,000 civil service jobs over the next three years. Part of the overall public spending cuts in 2014 will include a €1.3bn cut from social security benefits, including pensions.