"Workers and the self-employed in retirement have the right to a pension commensurate to their contributions and ensuring an adequate income. Women and men shall have equal opportunities to acquire pension rights. Everyone in old age has the right to resources that ensure living in dignity".
Old-age income and pensions are central to the European social model. Under Principle 15 of the European Pillar of Social Rights, workers and the self-employed in retirement have the right to a pension commensurate with their contributions and ensuring an adequate income. Women and men must have equal opportunities to acquire pension rights, and everyone in old age has the right to resources that ensure living in dignity.
Pensions remain primarily a national competence, but the EU supports Member States through policy coordination, social security coordination, analytical reports, benchmarking, mutual learning and legislation protecting the pension rights of mobile workers. The main policy challenge is to preserve both the adequacy and sustainability of pension systems in the context of demographic ageing, longer life expectancy, changing labour markets and persistent inequalities in pension outcomes.
The issue is not only fiscal. Pension policy also concerns social fairness, gender equality, labour-market participation, long-term care needs and intergenerational solidarity. Adequate old-age income depends on lifetime employment patterns, contribution records, access to supplementary pensions, care responsibilities, health status and the capacity of welfare systems to protect people against poverty in later life.
Pensions remain primarily a national competence, but the EU supports Member States through policy coordination, social security coordination, analytical reports, benchmarking, mutual learning and legislation protecting the pension rights of mobile workers. The main policy challenge is to preserve both the adequacy and sustainability of pension systems in the context of demographic ageing, longer life expectancy, changing labour markets and persistent inequalities in pension outcomes.
The issue is not only fiscal. Pension policy also concerns social fairness, gender equality, labour-market participation, long-term care needs and intergenerational solidarity. Adequate old-age income depends on lifetime employment patterns, contribution records, access to supplementary pensions, care responsibilities, health status and the capacity of welfare systems to protect people against poverty in later life.
Challenges
Europe’s population is ageing, and this will continue to affect pension systems, labour markets and public finances. The Commission’s pensions page underlines that pensioners in most EU countries are more likely to be poor than people in work, and that inequalities among pensioners persist. Older women face a higher risk of poverty or social exclusion than older men, while women’s pensions are almost a third lower on average. People in non-standard work or self-employment often face less favourable conditions for accessing and accruing pension rights than workers in open-ended, full-time contracts.
The 2024 Pension Adequacy Report confirms that pension adequacy must be assessed not only by looking at statutory pensions, but also by considering supplementary pensions, survivors’ pensions, minimum income provision for older people and the interaction between pension income and long-term care needs. The report pays particular attention to old-age inequalities, including the gender pension gap and the cumulative effects of unequal working lives.
At the same time, pension systems must remain financially sustainable. The 2024 Ageing Report provides long-term projections of the budgetary impact of ageing in the EU, including public expenditure on pensions, healthcare, long-term care and education up to 2070. These projections show that ageing is not only a pension issue: it also increases pressure on health and long-term care systems.
This creates a difficult policy balance. Reforms that improve fiscal sustainability may reduce future pension adequacy if benefits become too low. Conversely, measures that improve adequacy may increase long-term public expenditure if they are not accompanied by higher employment, longer and healthier working lives, productivity growth or stronger supplementary pension coverage.
Europe’s population is ageing, and this will continue to affect pension systems, labour markets and public finances. The Commission’s pensions page underlines that pensioners in most EU countries are more likely to be poor than people in work, and that inequalities among pensioners persist. Older women face a higher risk of poverty or social exclusion than older men, while women’s pensions are almost a third lower on average. People in non-standard work or self-employment often face less favourable conditions for accessing and accruing pension rights than workers in open-ended, full-time contracts.
The 2024 Pension Adequacy Report confirms that pension adequacy must be assessed not only by looking at statutory pensions, but also by considering supplementary pensions, survivors’ pensions, minimum income provision for older people and the interaction between pension income and long-term care needs. The report pays particular attention to old-age inequalities, including the gender pension gap and the cumulative effects of unequal working lives.
At the same time, pension systems must remain financially sustainable. The 2024 Ageing Report provides long-term projections of the budgetary impact of ageing in the EU, including public expenditure on pensions, healthcare, long-term care and education up to 2070. These projections show that ageing is not only a pension issue: it also increases pressure on health and long-term care systems.
This creates a difficult policy balance. Reforms that improve fiscal sustainability may reduce future pension adequacy if benefits become too low. Conversely, measures that improve adequacy may increase long-term public expenditure if they are not accompanied by higher employment, longer and healthier working lives, productivity growth or stronger supplementary pension coverage.
Policy responses
Pension policy and pension legislation are decided and implemented mainly at national level. However, the EU contributes to pension adequacy and sustainability through coordination, monitoring, legislation for mobile workers and support for national reforms.
First, EU social security coordination protects state pension rights for people who move between Member States. This ensures that mobile workers do not lose pension rights because their careers are divided across several countries. Second, EU law protects supplementary pension rights for mobile workers, reducing barriers to labour mobility created by occupational pension schemes.
The EU also supports Member States through the triennial Pension Adequacy Report, prepared jointly by the European Commission and the Social Protection Committee. The 2024 edition provides a comparative assessment of whether pension systems allow older people to retire with adequate income today and in the future. It also examines old-age inequality, the gender pension gap, supplementary pensions, survivors’ pensions and the role of long-term care in shaping living standards in old age.
The 2024 Ageing Report complements this analysis from a fiscal perspective. It assesses the long-term economic and budgetary consequences of population ageing and provides projections for age-related public expenditure in EU Member States over the period 2022–2070.
The EU also provides country analysis and guidance through the European Semester, supports reforms through the Recovery and Resilience Facility and the Technical Support Instrument, and promotes mutual learning among Member States. In 2022, the Social Protection Committee approved a benchmarking framework on pension adequacy to support the implementation of Principle 15 of the European Pillar of Social Rights.
Pension policy and pension legislation are decided and implemented mainly at national level. However, the EU contributes to pension adequacy and sustainability through coordination, monitoring, legislation for mobile workers and support for national reforms.
First, EU social security coordination protects state pension rights for people who move between Member States. This ensures that mobile workers do not lose pension rights because their careers are divided across several countries. Second, EU law protects supplementary pension rights for mobile workers, reducing barriers to labour mobility created by occupational pension schemes.
The EU also supports Member States through the triennial Pension Adequacy Report, prepared jointly by the European Commission and the Social Protection Committee. The 2024 edition provides a comparative assessment of whether pension systems allow older people to retire with adequate income today and in the future. It also examines old-age inequality, the gender pension gap, supplementary pensions, survivors’ pensions and the role of long-term care in shaping living standards in old age.
The 2024 Ageing Report complements this analysis from a fiscal perspective. It assesses the long-term economic and budgetary consequences of population ageing and provides projections for age-related public expenditure in EU Member States over the period 2022–2070.
The EU also provides country analysis and guidance through the European Semester, supports reforms through the Recovery and Resilience Facility and the Technical Support Instrument, and promotes mutual learning among Member States. In 2022, the Social Protection Committee approved a benchmarking framework on pension adequacy to support the implementation of Principle 15 of the European Pillar of Social Rights.
Supplementary pensions and mobility
Supplementary pensions are increasingly important in several Member States because statutory pensions alone may not be sufficient to maintain living standards in old age. However, supplementary pension systems can also create barriers to labour mobility if workers lose rights when they move between employers or Member States.
EU law therefore includes specific rules to protect supplementary pension rights. Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community — CELEX: 31998L0049 was an early step in protecting people who move across borders.
This was complemented by Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014 on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights — CELEX: 32014L0050. This directive aims to reduce obstacles to worker mobility caused by rules on acquisition and preservation of supplementary pension rights.
Occupational pension institutions are also regulated by Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision — CELEX: 32016L2341. This directive, known as IORP II, sets common standards for the governance, supervision and information duties of occupational pension institutions.
Finally, the EU has created a framework for personal pension products through Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product — CELEX: 32019R1238. The PEPP framework is intended to provide a voluntary, portable personal pension product across the EU, although its practical uptake remains a policy challenge.
Supplementary pensions are increasingly important in several Member States because statutory pensions alone may not be sufficient to maintain living standards in old age. However, supplementary pension systems can also create barriers to labour mobility if workers lose rights when they move between employers or Member States.
EU law therefore includes specific rules to protect supplementary pension rights. Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community — CELEX: 31998L0049 was an early step in protecting people who move across borders.
This was complemented by Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014 on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights — CELEX: 32014L0050. This directive aims to reduce obstacles to worker mobility caused by rules on acquisition and preservation of supplementary pension rights.
Occupational pension institutions are also regulated by Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision — CELEX: 32016L2341. This directive, known as IORP II, sets common standards for the governance, supervision and information duties of occupational pension institutions.
Finally, the EU has created a framework for personal pension products through Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product — CELEX: 32019R1238. The PEPP framework is intended to provide a voluntary, portable personal pension product across the EU, although its practical uptake remains a policy challenge.
Gender pension gap and old-age inequality
Old-age income inequality reflects inequalities accumulated during working life. Women are more likely to have career breaks, part-time work, lower earnings, unpaid care responsibilities and shorter contribution records. These factors contribute to a persistent gender pension gap and to a higher risk of poverty or social exclusion among older women.
The 2024 Pension Adequacy Report places particular emphasis on old-age gender inequalities and shows that pension adequacy cannot be separated from labour-market participation, pay gaps, care responsibilities and access to pension rights throughout the life course.
This means that pension policy must be connected to broader EU social policy: gender equality, work-life balance, access to childcare and long-term care, active ageing, lifelong learning and equal opportunities in employment. A pension system can only be adequate in old age if people have fair opportunities to build pension rights during working life.
Old-age income inequality reflects inequalities accumulated during working life. Women are more likely to have career breaks, part-time work, lower earnings, unpaid care responsibilities and shorter contribution records. These factors contribute to a persistent gender pension gap and to a higher risk of poverty or social exclusion among older women.
The 2024 Pension Adequacy Report places particular emphasis on old-age gender inequalities and shows that pension adequacy cannot be separated from labour-market participation, pay gaps, care responsibilities and access to pension rights throughout the life course.
This means that pension policy must be connected to broader EU social policy: gender equality, work-life balance, access to childcare and long-term care, active ageing, lifelong learning and equal opportunities in employment. A pension system can only be adequate in old age if people have fair opportunities to build pension rights during working life.
Ageing, sustainability and intergenerational solidarity
The EU’s Green Paper on Ageing — Fostering solidarity and responsibility between generations — COM(2021) 50 final — CELEX: 52021DC0050 opened a broad policy debate on demographic ageing. It framed ageing not only as a pension challenge, but as a societal transformation affecting employment, health, care, public finances, productivity, housing, mobility and intergenerational solidarity.
The ageing of Europe’s population increases pressure on public pension systems, especially where fewer workers contribute to schemes supporting a growing number of retirees. At the same time, longer life expectancy requires policies that support active and healthy ageing, longer working lives where appropriate, adequate income in retirement and access to care services.
For this reason, pension reform cannot be treated only as a budgetary issue. It must also consider fairness between generations, adequacy for current and future pensioners, the role of supplementary pensions, labour-market inclusion of older workers and the capacity of health and long-term care systems to support dignity in old age.
The EU’s Green Paper on Ageing — Fostering solidarity and responsibility between generations — COM(2021) 50 final — CELEX: 52021DC0050 opened a broad policy debate on demographic ageing. It framed ageing not only as a pension challenge, but as a societal transformation affecting employment, health, care, public finances, productivity, housing, mobility and intergenerational solidarity.
The ageing of Europe’s population increases pressure on public pension systems, especially where fewer workers contribute to schemes supporting a growing number of retirees. At the same time, longer life expectancy requires policies that support active and healthy ageing, longer working lives where appropriate, adequate income in retirement and access to care services.
For this reason, pension reform cannot be treated only as a budgetary issue. It must also consider fairness between generations, adequacy for current and future pensioners, the role of supplementary pensions, labour-market inclusion of older workers and the capacity of health and long-term care systems to support dignity in old age.
Analytical comment
Old-age income and pensions are one of the most politically sensitive areas of EU social policy. The EU does not harmonise national pension systems, but it increasingly shapes the debate through monitoring, coordination, fiscal surveillance, social benchmarking and rules protecting mobile workers.
The central tension is between adequacy and sustainability. Pension systems must provide older people with income that allows them to live in dignity, but they must also remain financially viable as Europe ages. This balance will become more difficult as demographic change reduces the working-age population and increases demand for pensions, healthcare and long-term care.
A modern pension policy therefore needs to combine several objectives: protecting people from poverty in old age, reducing the gender pension gap, supporting longer and healthier working lives, improving access to supplementary pensions, protecting mobile workers and ensuring that pension reforms do not shift excessive risks onto future generations.
For eEuropa, this page should move away from being mainly a summary of one ageing report and become a broader policy page on pension adequacy, sustainability, mobility, gender equality and old-age dignity in the EU.
Old-age income and pensions are one of the most politically sensitive areas of EU social policy. The EU does not harmonise national pension systems, but it increasingly shapes the debate through monitoring, coordination, fiscal surveillance, social benchmarking and rules protecting mobile workers.
The central tension is between adequacy and sustainability. Pension systems must provide older people with income that allows them to live in dignity, but they must also remain financially viable as Europe ages. This balance will become more difficult as demographic change reduces the working-age population and increases demand for pensions, healthcare and long-term care.
A modern pension policy therefore needs to combine several objectives: protecting people from poverty in old age, reducing the gender pension gap, supporting longer and healthier working lives, improving access to supplementary pensions, protecting mobile workers and ensuring that pension reforms do not shift excessive risks onto future generations.
For eEuropa, this page should move away from being mainly a summary of one ageing report and become a broader policy page on pension adequacy, sustainability, mobility, gender equality and old-age dignity in the EU.
Key EU documents
- Green Paper on Ageing — Fostering solidarity and responsibility between generations — COM(2021) 50 final
- The 2024 Pension Adequacy Report — Current and future income adequacy in old age in the EU — European Commission and Social Protection Committee
- The 2024 Ageing Report — Economic and Budgetary Projections for the EU Member States 2022–2070 — Institutional Paper 279
- Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community
- Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014 on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights
- Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision
- Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product
eBriefing PaaS · EU Old Age Income & Pensions
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