Retirees across Europe face significant variations in pension income. On average, a French pensioner receives close to €1,500 per month, a Bulgarian about €550, and a Luxembourg pensioner more than €2,600, rising considerably for those whose entire career was spent in Luxembourg.
However, these numbers do not paint the full picture. What truly matters to most workers is not simply the absolute amount, but how much of their previous income they will keep once they retire – that is, whether they can maintain their purchasing power.
This issue is highlighted by a map shared on Saturday by Toute l’Europe:
The map presents the replacement rate within the European Union: in other words, the percentage of a person’s former income that is still received after retirement.
The Netherlands tops the ranking, offering a generous replacement rate of 96%. Portugal comes in second at 92.7%, followed by Greece at 88.5%. Luxembourg places just behind with a replacement rate of 87.7%. This means that, on average, pensioners in Luxembourg experience a 12.3% drop in income after retiring.
While this rate is still enviable by European standards, some countries fare far worse. Lithuania records the lowest replacement rate at 28.2%, with Ireland at 33.7% and Estonia at 37.8%. France’s rate stands at 70%, Belgium at 61.1%, and Germany at 55.3%.
It is important to note, however, that the pension replacement rate presents only a partial view. It ignores additional sources of income that retirees may have, such as investment returns, rental income, or part-time work. On this front, another indicator shows that Luxembourg’s retirees remain exceptional.
The Organisation for Economic Co-operation and Development (OECD) therefore also examines total income for people over 65.
According to this indicator, the income gap narrows among EU countries. In France, those over 65 have an average income that is 94.3% of the general population’s; similar figures are seen in Italy (98.8%), Portugal (97.1%), and Spain (96.7%).
Baltic countries fare less well: in Estonia and Lithuania, those over 65 earn just 66.2% and 66.5% respectively of the national average, while in Latvia the figure is 70%.
Luxembourg, however, stands out: those over 65 have an average income that is actually higher than the rest of the population, at 107%.
In other words, according to the OECD’s measure, retirees in Luxembourg live more comfortably than the working population. It must be remembered, though, that averages conceal disparities.
As previously reported by RTL, there are considerable differences between Luxembourg retirees, particularly between those from the private sector and those in the public sector who benefit from special transitional pension schemes, sometimes a difference of nearly double.
