Pensions remain the primary source of income for older people across Europe, but how much retirees receive varies sharply from country to country, highlighting deep economic and structural differences in national retirement systems.
Across the European Union, around two-thirds of income for people aged 65 and over comes from public transfers, mainly state pensions and benefits. Even so, retirees earn on average about 86% of the income of the total population, according to data from the OECD. The ratio falls below 70% in the Baltic states and below 80% in countries such as Belgium, Denmark, and Switzerland.
The latest Eurostat figures show that in 2023 the average gross annual old-age pension in the EU stood at €17,321, or about €1,443 per month.
Looking across 34 European countries, pension levels range widely. The lowest average annual pensions are found in Turkey at around €3,400, while Iceland tops the list at just over €38,000. Among EU member states, Bulgaria records the lowest average at €4,479, while Luxembourg leads with more than €34,000.
Several countries in eastern and south-eastern Europe, including Romania, Hungary, Latvia, Croatia, and Slovakia, also report average pensions below €8,000 a year, underlining how uneven retirement incomes remain across the continent.
The EU’s four largest economies cluster just above the bloc’s average. Italy pays the highest pensions among them, followed by Spain, France, and Germany. All five Nordic countries also exceed the EU average.
Experts caution that headline comparisons can be misleading because pension systems differ significantly. Some countries rely heavily on state-funded, pay-as-you-go schemes, while occupational and private pensions play a much smaller role, shaping overall outcomes for retirees.
When pensions are adjusted for purchasing power, reflecting differences in living costs, the gap narrows substantially. In purchasing power standards, pensions range from about 6,700 in Bosnia and Herzegovina to just over 22,000 in Luxembourg, reducing the highest-to-lowest ratio to just over three to one.
This adjustment reshuffles rankings. Spain and Turkey rise sharply once cost-of-living differences are taken into account, while countries such as Switzerland and Slovakia fall back. Analysts note that benefits such as subsidised healthcare, housing, and transport in some countries also boost retirees’ effective living standards.
Despite these adjustments, pension adequacy remains a concern. In many EU countries, pensions replace less than half of pre-retirement earnings, making it harder for older people to maintain their standard of living. As populations age and public finances come under strain, pension income is set to remain a central political and economic issue across Europe.
