Most Europeans Unaware of Pensions Timebomb

Most European Union citizens do not think there is a need to raise the official retirement age in the next 20 years, despite acknowledging increased longevity.

(January 23, 2012)  —  Two thirds of European Union citizens do not support an increase in the official retirement age by 2030, despite recognising improving longevity and a falling birth-rate of workers to fund the region’s pension system, a survey from the European Commission has found.

Only a third of respondents to the Eurobarometer survey Active Ageing, published this month, said they believed the official retirement age should increase by 2030. This was despite 71% of respondents realising the region’s population was getting older.

The EC survey said: “Since 1960, life expectancy has climbed by eight years and demographic projections foresee a further five-year increase over the next four or five decades. We are all living longer and, together with low birth rates, Europe’s population is ageing fast and it is happening all over the world, except in the poorest countries.”

The average age of retirement across the EU is 61.5 years, although 42% of respondents to the survey said they thought they would be able to work until they were 65.

A report to accompany the survey said population ageing presented a number of challenges for welfare systems and public finances.  It said that EU member states spent, on average, more than a quarter of their GDP on social protection. Most of this was allocated to older people in the form of pensions, health, and long-term care.

Across the EU, governments have been raising the age at which their citizens can draw a pension as a result of people living longer and a falling number of new workers supporting system through their taxes.

This month economists at Deutsche Bank urged Germany’s government to press ahead with its plans to increase the age at which its citizens would be able to draw a pension, even if it meant politicians would be unpopular with the electorate.

Elsewhere in the EU, both the countries directly involved in the Eurozone crisis and those on the periphery have also implemented plans to increase this retirement age.

The EC’s survey said: “The current economic crisis has left Member States with large public deficits and public debt burden just at a time when the post-war baby-boomers are entering their sixties and starting to retire. The key issue today is how to secure good social protection in an increasingly challenging economic and demographic context.”

Conversely, a third of respondents said they would like to continue working after they reached retirement age.

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