With an ageing population and increased life expectancy, Europe faces a very concrete challenge: how to fund its pension systems. Earlier this year in Brussels, pensioners took to the streets to demand better job security and to oppose the raising of the retirement age.
In Europe, some are advocating lowering the retirement age as a way to improve workers' quality of life and to encourage generational turnover in the workforce.
Others argue that this would jeopardise the sustainability of pension systems, which are already weakened by an ageing population and increased life-expectancy.
A third option, of combining work and pensions, is widely practised in countries such as Sweden, Estonia and Denmark, where more than 30 percent of new retirees remain active in the workforce, either part-time or with flexible hours.
According to a survey by Spain's national statistics agency, in that country a total of 184,900 people aged 50 to 74 continued working in the six months after receiving their first pension payment. This represented 4.9 percent of retirees, below the European average (13 percent). In France and Italy too, the figure is below five percent.
This disparity highlights the influence of national policies on employment among older people and on financial security in old age, both of which are key factors in the sustainability of the pension system.
In recent years, in places such as France and Germany, efforts to strike this difficult balance have met with protests and fraught political debate.
“In Spain, more than 37 percent of pensioners — around 3.3 million people — receive less than €750 per month”, according to the Spanish Union of Retired and Pensioners of the trade union UGT (UJP-UGT).
UGT explains that those who continue working for personal reasons are in the minority and that the rest do so out of economic necessity, and because they work in sectors such as retail, cleaning, or caregiving. In such cases, undeclared or irregular earnings become commonplace.
“A decent retirement and access to a contributory pension should be a right, without this implying that people cannot continue working if they wish to do so and meet the legal requirements”, says the UJP-UGT.
According to the national statistics agency, in Spain 18.8 percent of those who continue to work do so for purely economic reasons, as they need to supplement their income.
Meanwhile, 48.7 percent do it for other reasons too, such as their partner still being in work.
In the view of civil-society groups, there's often no incentive for older people to stay, given how hard it is for them to adjust their jobs to their changed capacities. These groups think the goal of the pension system should be to make sure such people have a decent quality of life, no matter what method is used.
A study by the Foundation for Applied Economic Studies (Fedea) found that adding restrictions to retirement can affect people’s health, increasing the risk of dying before the age of 70.
The motivations for continuing to work after retirement vary significantly between European countries.
While in Spain many people who remain active do so by personal choice, either for career reasons or simply to keep busy, in other countries economic necessity is the clear priority.
According to Eurostat data, in Cyprus, Romania, Bulgaria, Croatia, and Latvia, more than 50 percent of retirees who continue working do so for strictly economic reasons.
These differences reflect not only the different realities of the given pension system, but also the structural inequalities that divide Europe in terms of living standards and social protection.
In Greece, too, many retirees continue to work to supplement insufficient pensions, although much of this activity appears to be undeclared.
In 2023, the government attempted to curb the practice by eliminating the 30 percent reduction in pensions for those who declared their employment.
Retirees who work without declaring their employment will now be penalised with a fine equivalent to one full year of pension. However, declaring employment remains unattractive: salaried workers see an additional 10 percent deducted from their income, and the self-employed face contributions of up to 50 percent, all of which encourages them to remain in the informal economy.
“Delaying retirement (by choice) should not only be seen as a positive step in terms of reducing public spending, but should go hand in hand with improving working conditions for workers”, argues Inmaculada Ruiz, president of the Democratic Union of Pensioners and Retired People (UDP), in Spain.
She argues that demoting people over a certain age to lower positions is “wasting” senior talent. The associations agree that this type of partial or flexible retirement could promote and “ensure participatory ageing”, especially in a society where value is measured by productivity.
They point out that work is an important way of participating in society. Indeed, many people feel marginalised when they retire from a social environment that has been their routine for years.
In other countries, such as the Czech Republic, the reality is quite different. In 2024, around 195,000 retired people were still working in Czech Republic, according to the country's labour ministry. Half of them were over 67. And more than 80 percent were formally employed, with the rest working on a contract basis or as freelancers.
At the end of that year, a reform of the system was imposed, which received criticism for its lack of “structural” vision.
The newspaper Denik Referendum cites its measures to delay the retirement age, to cut pension rises, but also to eliminate social-security payments for pensioners who continue to work — an incentive not implemented until 2025.
Formerly, all workers in Czech Republic, including pensioners, had to contribute 6.5 percent of their gross income to pension insurance. In exchange, pensioners who continued to work received a small increase in their pension: a 0.4 percent increase in the calculation base for every 360 days worked, which was maintained for life, even after they stopped working.
With the reform, working pensioners are no longer required to pay the 6.5 percent contribution, which means they have more money left over each month.
For example, a pensioner with a gross income of CZK 20,000 – about €700 – can keep an additional CZK 1,300 per month – about €45. The labour ministry estimates that this exemption will cost the public coffers around CZK 4bn a year – approximately €139m.
However, the government believes that the incentive will encourage more pensioners to continue working, allowing the state to recoup some of the loss through increased tax revenues, for example, in income tax or VAT on higher consumption.
Many believe that an active retirement should at least be an option, especially given increasing life expectancy. Spain is the EU country with the highest life expectancy: 84 years, somewhat above the European average of 81.5 years, according to the most recent Eurostat data.
Yet, says the UJP-UGT, “recruitment processes rarely include profiles over the age of 55. Many CVs are discarded because of age, even before the candidates’ experience is reviewed.“
UJP-UGT points out that older people are not included in skills retraining programmes because they are considered too ”close to retirement“, thus cementing their exclusion from the world of work.
Yet the UDP president believes that such schemes must always remain an option, lest the lack of alternatives make retirement “more a forced destination than a free choice”.
The real question, in the view of the UDP, “is how we guarantee the right to a dignified retirement for those who want it, and meaningful and dignified employment for those who can and want to remain active“.
The union advocates a ”transformative social agenda that recognises the value of people at all stages of life”. This, they argue, would address a wide range of challenges, such as structural poverty, gender inequality, informal employment, and ageism.
This article was produced as part of the PULSE, a European initiative supporting cross-border journalistic cooperation. It was first published on El Confidencial.
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Ana Somavilla (El Confidencial), Kim Son Hoang (Der Standard, Austria), Julie Šafová (Deník Referendum, Czechia), Lena Kyriakidi (EFSYN, Greece), Silvia Martelli (Il Sole 24 Ore, Italy)