As the EU population ages and Brussels urges member states to boost private pension schemes, most people in France, Germany, Spain, and Italy believe their country’s state pension system is already unaffordable.
However, they also think the current scheme is not generous enough, and do not support many options for revamping it, such as raising the retirement age, according to a YouGov survey.
Greece and Italy spend the largest proportion of national income on public pensions among OECD countries, at around 16% of their GDP, according to an OECD report.
Austria, France and Portugal followed, committing between 13% and 14% of their budget.
Two-thirds of French, German, and Spanish respondents claim that the state pension system in their country will be unaffordable by the time people who are currently in their 30s and 40s retire.
On the other hand, those who are already retired are consistently more optimistic about their country’s ability to fund the state pension system.
Is there a consensus for a solution?
Over 70% of non-retired Italians and Poles do not feel confident that they will have enough money to live a comfortable retirement.
Among French and Spanish respondents, the totals come to 66% and 64% respectively.
Despite recognising the challenges facing the state pensions system, there is limited support for actions that could help rectify the issue.
Providing support for older workers to stay in their jobs for longer rather than retiring, and introducing a legal requirement for working-age people to additionally pay into a private or workplace pension, or savings plan, are the most popular options amongst the retired and working respondents in the five EU countries.
Polish respondents were particularly fond of providing support for older workers, while Germans preferred the additional pay into a private or workplace pension.
Italy was the only member state in favour of reducing or entirely removing the state pension for high-income retired people.
The least preferred solutions were increasing tax levels on working-age people, reducing funding towards government services supporting older people, and reducing the amount all pensioners receive in state pension payments.
What are the EU’s plans to tackle this issue?
State pensions in most EU countries operate on a pay-as-you-go basis, meaning current workers finance current retirees.
With the working-age population shrinking and non-standard employment on the rise, citizens in several member states lack the certainty of securing an adequate pension in the future, particularly women.
The gender pension gap – the difference in average pension income between men and women – stands at 24.5%.
The European Commission has outlined a two-pillar approach to boost retirement savings and mobilise up to €10 trillion in bank deposits across the bloc to support strategic EU priorities, especially defence, security, and the digital and green transitions.
