A report from the European Commission says that although EU countries are improving their efforts to create sustainable, adequate pensions through reforms, additional measures are still needed, such as making better strides to prevent old-age poverty, and closing the pension gender gap.
“Adequate pensions are essential in preventing poverty and social exclusion among older people in Europe, especially women,” said Marianne Thyssen, European commissioner for employment, social affairs, skills, and labor mobility, in a release. “And we need to make sure that people in non-standard work or self-employment are not left out. Our priority must to be to pursue ongoing reforms that encourage adequate pensions for everyone.”
According to the 2018 Pensions Adequacy Report, there are 1.9 million fewer older Europeans at risk of poverty or social exclusion than 10 years ago, and the number of employed older workers has increased by 4.1 million over the past three years alone. However, it said 18.2% of people age 65 and over, or approximately 17.3 million, in the EU remain at risk of poverty or social exclusion, a figure that has remained relatively unchanged over the past five years.
The report also said that there are still stark differences between countries and population groups, such as the fact that women’s pensions are still 37% lower than men’s due to lower salaries and shorter careers linked to caring responsibilities. It said steps that can be taken to help close this gap include promoting equal distribution of caring responsibilities, addressing labor market participation, work intensity, and career breaks. In particular, the report said pension policies should adequately protect care-related breaks.
It also said that the self-employed often face less favorable conditions for accessing and accruing pension rights than workers in standard employment. Additionally, the report found that the risk of poverty and social exclusion increases with age as more than half of all people age 65 and over are at risk of poverty or social exclusion in the EU are aged 75 or over. This was attributed to the value of pensions decreasing during retirement while needs tend to increase with age.
“To ensure the adequacy and sustainability of current and future pensions, pension systems need to promote longer working lives, in accordance with continuously increasing life expectancy,” said the report. “This can be done by encouraging life-long learning, providing a safe and healthy work environment, adjusting pensionable ages, rewarding later retirement, and discouraging early exit.”