Foto: BB.LV / Пенсионер считает деньги
According to OECD estimates, mandatory pensions will fall below the target pension income level in 22 out of 30 European countries studied. In the Pensions Outlook 2026 report, the OECD calculates how much more workers with average earnings need to save throughout their working lives to retire with an income of 70% of their gross earnings. Lithuania has the largest gap as a share of earnings, at 20.7% (12.3% in Latvia), while Switzerland has the highest estimated additional monthly contribution needed—over €1,000 per month for men with average salaries. The OECD refers to this as the contribution gap. This is the additional share of earnings that workers need to direct into a voluntary pension plan, beyond mandatory contributions, to reach the target level. The income people need in retirement partially depends on what expenses they anticipate. "There is no universal target for pension income levels. Instead of using target replacement rates, consumption benchmarks can be applied, meaning target spending levels to achieve a certain lifestyle in retirement," said OECD policy analyst Stéphanie Paye to Euronews Business. The OECD calculates contribution gaps, which among men with average salaries range from 0.4% in Turkey to 20.7% in Lithuania. In most countries, the figures for women are roughly similar. However, in Poland and Hungary, the gap for women is 8.6 and 2.9 percentage points higher, respectively. In many countries, the gap is in double digits: Ireland (19.4%), Poland (17.3%), Croatia (15.7%), Slovenia (12.5%), Latvia (12.3%), Estonia (12.2%), Switzerland (12.1%), Germany (11.1%), Belgium (10.7%), and Iceland (10%). "When gaps are large, it means that people often do not save enough, and they will not have sufficient funds for a decent standard of living in retirement," said Professor Ian Clacher from the University of Leeds to Euronews Business. In other major economies, the gap is 9.1% in the UK and 6.2% in France. It is smaller in Bulgaria (4.4%), Slovakia (3.9%), and Sweden (2.2%). The smallest positive gap is in Turkey - 0.4%. In Austria, Denmark, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain, mandatory pensions are expected to meet the OECD target for men with average salaries. ## ## How much more would workers need to save each month? Euronews Business applied the contribution rates calculated by the OECD to average gross salaries for 2025. The same percentage can translate into very different amounts depending on the level of earnings. Based on average gross salaries for 2025, the estimated additional contribution for men ranges from about €5 per month in Turkey to €1,084 in Switzerland. This amount exceeds €500 per month in Ireland (€974), Iceland (€716), Germany (€617), Belgium (€556), and Norway (€532). In the UK, a man with an average salary would need to save about €494 per month to reach the OECD benchmark. In France, this amount is €238, in Slovakia €64, in Bulgaria €68, in Sweden €91, in Romania €111, in Hungary €129, and in Poland €360. Even relatively small monthly contributions can be a heavy burden where salaries are lower. In 2025, average gross monthly earnings ranged from €1,549 in Turkey to €8,957 in Switzerland. In Germany, it was €5,558, in the UK €5,445, in Sweden €4,195, in France €3,830, in Poland €2,078, and in Hungary €1,772. At such salary levels, a pension income of 70% of earnings would amount to about €1,084 per month in Turkey and €6,270 in Switzerland. Why do contribution gaps differ? Professor Traute Meyer from the University of Southampton linked the large gap in pension contributions in Poland to the reduction of state pensions following the transition from state socialism to a market economy. She associated the large gap in Ireland with traditionally low mandatory pensions in a liberal welfare state. As a reason for the lower gap in Sweden, she pointed to strong state pension commitments rooted in social democracy. "Low gaps may also mean that only formally employed workers are protected, leaving many outside the mandatory coverage (Turkey)," she said. ## ## Purchasing power of money in retirement Professor Lauri Leppik from Tallinn University stated that a small gap in contributions says little about what a mandatory pension can buy in countries like Turkey. Clacher added: "The contribution gap alone does not provide a complete picture, as another important factor is the purchasing power of money in retirement." Pension incomes in Europe vary widely. In 2023, EU spending on pensions averaged about €1,440 per month per recipient, according to Eurostat. This figure refers to people who are already receiving pensions, including those with shorter working careers. The OECD benchmark, in contrast, applies to workers just entering the labor market and then completing a full working life. ## ## Poverty among retirees Meyer pointed to the risk of poverty in retirement. "Studies consistently show that voluntary pension savings are insufficient, especially among low-income individuals. People underestimate future needs, prioritize current expenses, distrust private schemes, or lack saving opportunities," she told Euronews Business. What might change before workers retire? The contribution gap is a forward-looking indicator. It says nothing about current retirees. "It is based on expected replacement rates for people entering the labor market today, assuming that the rules of the pension system remain unchanged until they retire," Paye said. Forecasts take into account changes already enshrined in law, including the planned increase in the retirement age. Professor Marek Góra from the Warsaw School of Economics noted that further changes could affect how much people need to save. In his view, a higher retirement age would reduce the need for additional savings, while lower replacement rates would increase it. "As a result, the real need for additional voluntary pension savings turns out to be less straightforward than suggested by the estimates," he said.
