In later life, people work fewer hours or stop working altogether. Many lack an alternative source of income and risk becoming or remaining poor. Many countries lack an efficient social protection system to cushion the elderly from poverty. About 90% of retirees in Europe and North America receive pension compared to 17% in sub-Saharan Africa, 30% in the Middle East, 47% in Asia and the Pacific, and 56% in Latin America and the Caribbean. Despite reporting a high number, 15.2% of the elderly in Europe are at risk of becoming poor. The figure has increased gradually from 13.9% in 2010. Nearly all European countries replicate this trend. In the decade between 2010 and 2019, the number of retirees in Estonia at risk of becoming poor tripled from 17.9% to 53.6%. Latvia reported an increase from 19.6% to 48.9%, while Lithuania experienced a rise from 12.6% to 41.7%. Some countries performed much better and lowered the risk. Norway reported a decline from 12.7% to 7.8%, while Greece reported a decrease from 19% to 8.7%. Unfortunately, things are not about to become better for Europe’s elderly population. As the continent gears up to a new decade of economic and political uncertainties, the elderly are exposed to more risk. It is no longer a viable option for the elderly to retire and work on their garden as a pass time, most look for alternative jobs or start businesses to generate income. Others opt for a pay cut to remain employed.
A Dire Situation In Estonia
Estonia has made significant progress in many fields, but there are still shortcomings. The country has the highest number of pensioners at risk of poverty in Europe. As of 2018, 53.6% of the elderly were at risk of becoming poor, a threefold increase compared to 17.9% in 2010. While pensioners in Norway, Denmark, Greece, North Macedonia, and Hungary enjoy retirement, those in Estonia are busy looking for odd jobs and discounts. The most disadvantaged are those who retired or were close to retiring in the late 1980s and early 1990s when the country was seeking independence. Many had saved their wealth in Russian rubles that were declared worthless. The introduction of the kroon meant that Estonians had to start saving from scratch. While the younger people benefited from a new free market and more opportunities, the older generation that depended on the Soviet pension system was staring at poverty. Because salaries and wages grow faster than pension, the rate of poverty has been on a gradual increase. The national pension insurance expenditure exceeds social tax revenues, and by 2017, the deficit had grown to over €474 million. The government cannot, therefore, maintain a sustainable pension system.
Pensioners In Germany
Germany might be Europe’s largest economy, but its pensioners are not safe from poverty. As of 2018, one in every five German pensioners was at risk of becoming poor. The situation is expected to worsen by 2040 as more people experience long periods of unemployment. In Germany, one is deemed poor if they live in a household with an average income of less than €905. Part-time work, precarious employment, and breaks in working life lead to financial problems in later life. The German pension system is under immense pressure as the population grows older. As of 2018, 31% of the employed were above 67 years, and the figure is set to rise to 47% by 2038. In late 2019 the Labour Ministry announced plans to introduce basic pension to supplement the pension of those who have worked for over 35 years, raised children, or care for relatives.
Pensioners In The United Kingdom
The number of pensioners at risk of becoming poor in the United Kingdom has declined slightly from 22.9% in 2010 to about 21.6%. However, the population of pensioners already in severe poverty is five times what it was in 1986. The rise in the risk of poverty among the elderly is attributed to the United Kingdom’s pension scheme and the “low basic payments and means-tested supplements.” The UK has historically failed to tackle old-age poverty that has led to a pile-up in pension claims. The basic pension in the country is about 16% of average earnings, which is quite low. Currently, approximately one in every six pensioners receive supplement pension to meet the essential cost of living.
Pensioners In Slovakia
The number of pensioners at risk of poverty in Slovakia rose from 6.7% in 2010 to 7% in 2018. Nevertheless, Slovakia has one of the most efficient pension systems in Europe. In just one decade, the average pension in the country has increased by 36%. Only 7% of pensioners risk poverty. Between 2009 and 2019, the number of retirees under the pension scheme rose from 929,000 to 1.07 million. In addition to retirement pension, widows, orphans, and the disabled receive stipends from the government.
The Future Of European Pension Systems
The number of pensioners at risk of poverty is likely to increase in the foreseeable future due to economic uncertainties, a rapidly aging population, and increased cost of living. By 2029 the last of the baby boomers will be retiring, and by 2046, millennials will start demanding pension. The declining fertility rate across the continent will see more people retire than enter the workforce, meaning that there will be more demand for money than the economy can create.