Increasing Pension Service Costs in Bulgaria: What the New Rates Mean for Future Retirees

The cost of buying a year of missing service for a pension in Bulgaria is set to rise significantly, with a year of service now priced at BGN 2,559. This is due to an increase in the price of a month of service, which is currently set at BGN 213.25. The change is a result of a planned rise in the minimum insurance income, which will increase to BGN 1,077 in 2025, aligning with the minimum wage.

Data from the National Social Security Institute reveals a decline in the number of people purchasing pension service years in 2023 compared to previous years. In the first half of this year, 1,366 individuals bought pension contributions, totaling BGN 9.7 million. This is fewer than the 1,674 people who did so last year, but the missing experience they needed was less as well—21.99 months compared to 23.49 months in 2022.

The peak year for purchasing service was 2022 when a record 4,707 people bought pension service for a total of BGN 32.8 million. This was the highest amount since 2019. The cost for one month of missing service is 19.8% of the minimum insurance income, which has risen from BGN 933 at the beginning of this year to BGN 1,077 next year.

Although the practice of purchasing pension service is still active, it remains a costly option. For those looking to cover a full five-year period of missing service, the total cost will increase to BGN 12,794 starting next year. It’s important to note that the additional insurance income purchased through this method does not count when calculating the pensioner’s individual coefficient.

Last year, the total amount spent on these purchases was nearly BGN 12 million, a significant sum, although the number of people opting for this option has decreased as the cost rises.