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Where in Europe do you get the best pension and at what age?

Pension systems in Europe are very different. Where in Europe do you work the longest for a pension and where do pensioners get the best income? Here are some comparisons.

“We work in shifts, including at night. It is impossible to work until the age of 64,” says Farid from France. He is a trade unionist and protested with more than 1 million French people against the government’s plans to raise the retirement age from 62 to 64.

But what is a nightmare for the French is a dream for the Germans, who will soon retire at 67, writes “Deutsche Welle”.

What comparisons can be made?

The systems are very different, says Monica Quaiser of the Organization for Economic Co-operation and Development (OECD). But some things are similar in most countries: “Firstly, the birth rate has fallen and secondly, life expectancy is increasing. And consideration must be given to how to distribute the additional burden so that only the youngest are burdened. All of this has to be funded.”

Comparisons of European pensions hide some pitfalls. However, three criteria are particularly important: public expenditure, i.e. how much the respective pension system costs, what is the actual amount of pension that one receives and at what age one can retire.

At what age do they retire in different European countries? And in Bulgaria?

The Dutch work the longest. For a pension from the social security system, the applicant must be 66 years old. But most people stop working earlier and retire as early as 63. And in Germany, many people retire at 63, even though the official retirement age is currently 63 years and 8 months. In addition, the retirement age is constantly raised by a few months depending on the year of birth.

Most Italians retire at around 62, although they should work until 64, the Greeks retire at around 60 and the French around 61.

In Bulgaria, the right to a pension for social security experience and age in 2022 was acquired upon reaching 61 years and 10 months and having social security experience of 36 years and 2 months for women. For men, they were required to be 64 years and 5 months old and have 39 years and 2 months of insurance experience. And in Bulgaria, the retirement age is gradually increasing. You can see the data for the requirements in 2023 here.

In a number of countries, individual industry and collective agreements provide for various exemptions. However, the actual and usual retirement ages do not differ that much. A number of countries will increase the retirement age in the coming years. In France, it’s still relatively low, but even there you need to have paid almost 42 years of contributions to be able to retire at 62 without any deductions, Quaiser explains.

The Dutch earn an average of 89% of their last net salary

How much do pensioners in Europe really get? The OECD compares the so-called “net replacement rate”, i.e. what portion of final net income do people receive after retirement. Dutch people’s pensions are equal to 89% of their last net salary. Those of the Greeks correspond to 84% of the last salary, for the Italians this percentage is 82 percent, for the French – 74%. German pensioners receive just over half (53%). Lithuanians receive even less (31%). According to OECD data, as of 2020, Bulgarians received 74% of their net salary. However, according to NOI, by 2021 the net replacement rate in Bulgaria was only 59.2%.

Where do they get the “best” pensions?

Monika Quaiser says: “If the criterion “best pension” is taken as a basis, there are certainly some southern European countries that still guarantee a relatively high replacement rate.” But precisely these countries allocate a significantly larger share of their gross domestic product to pensions. Money that is lacking in other areas.

Italy and Greece spend almost 16% of GDP on pensions, France – 13.4% and Germany – 10.4%. In contrast, the Netherlands spends just 5% and Ireland just 3%. However, anyone who has lived or worked in the Netherlands from the age of 15 onwards receives a minimum pension of €1,218. Many industries are also required to offer company pensions. In the Netherlands, however, the retirement age is also rising.

Mixed systems with several different funding pillars, such as those in the Netherlands, also exist in Denmark and Sweden and work well, according to Quaiser. The German system is not bad either, “but Germany is facing a serious aging society”, which is causing problems.

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