Current and future income adequacy in old age in the EU

Principle 15 of the European Pillar of Social Rights states the right of workers and the self-employed to adequate old age income, and equal opportunities for women and men to acquire pension rights. As outlined in the European Pillar of Social Rights Action Plan, the EU supports national efforts to ensure adequate pensions through EU legislation, EU funding, monitoring and analysis, and mutual learning activities.

The 2024 Pension Adequacy Report, jointly prepared by the European Commission and the Social Protection Committee, provides a state of play of pension adequacy and key challenges across the EU. The report pays particular attention to the old-age gender inequalities resulting from gaps cumulated during working lives. Given the importance of services in ensuring decent living standards in old age, the report also explores the interaction between pensions and long-term care.

The Pension Adequacy Report was endorsed by the EPSCO Council of 20 June 2024 with the adoption of Council Conclusions on Pension Adequacy.

The report consists of two volumes.

Volume I presents a comparative analysis of the degree to which EU pension systems ensure adequate income in retirement, today and in the future, and an overview of the measures taken by Member States, notably in response to recent crises, and their impact on pensioners’ living standards. It also explores the role of redistribution mechanisms, such as minimum old-age benefits, and pension taxation. Based on the theoretical replacement rate methodology and micro-simulation exercises, the report estimates how the adequacy of pensions could develop in the future. Finally, it analyses how socio-economic inequalities are transmitted into old age, differences between standard and non-standard work.

Volume II (country profiles) provides a detailed description of the pension system in the 27 Member States and Norway.

The report is prepared in parallel with the Ageing Report of the Economic Policy Committee and the Commission, and uses the same underlying assumptions, aiming for a co-ordinated assessment of pension adequacy and financial sustainability of ageing-related expenditure.

Comments from social partners and civil society:
1.    ETUC
2.    AGE Platform Europe

Technical annexes:
3.   Theoretical replacement rate methodology
4.   List of pension schemes used in the theoretical replacement rates 

The paper Long-term projections of pension adequacy in a selection of countries complements the Pension Adequacy Report 2024. 

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