Is it Still Possible to Receive an Adequate Income from Pensions in the Era of Ageing Societies?—The Great Pension Gap Challenge in Europe

With societies aging and pension gaps deepening, supplementary pension schemes are treated as the most suitable way of ensuring adequate benefits for pensioners. However, a significant question underlying this research has arisen: how much should one save over the course of his or her professional career to ensure the future pension gap is covered? The following study has two main objectives: to identify the size of the pension gap in five countries (France, Germany, Italy, Spain, and Poland) and to estimate the level of additional savings required to cover it. The study shows that the size of the future pension gap for the average worker in these five countries is between 19% (Italy) and 40% (Poland). Due to different socioeconomic and demographic conditions, the amount of monthly savings needed to cover this gap will vary significantly. In relative terms, fully financing the pension gap for the average worker in a base scenario requires savings from 12% (Italy) to 20% (Poland) of their gross salary. Apart from offering a base scenario, the chapter also includes a sensitivity analysis which considers different values of the applied model’s parameters.