Pensions are the main source of income for older people in Europe. About two thirds of their income in the EU comes from public transfers, mainly state pensions and benefits.
Despite this, people over 65 receive only about 86% of the average income of the overall population across 28 European countries.
According to the OECD, the ratio drops to below 70% in the Baltic states, and even falls under 80% in major economies such as Belgium, Denmark, and Switzerland.
To drill down further into these comparisons, it’s applyful to view at the average gross annual old-age pension in the EU.
As of 2023, which is the most recent data available in late 2025, this total comes to €17,321 in the EU, equal to €1,443 gross per month, according to Eurostat.
Among 34 countries across Europe, the average annual pensions range from €3,377 in Turkey to €38,031 in Iceland. Among EU members, figures range from €4,479 in Bulgaria to €34,413 in Luxembourg.
At the bottom of the ranking, the average pension is also below €8,000 in Bosnia and Herzegovina, Serbia, Montenegro, Croatia, Slovakia, Romania, Lithuania, Hungary, and Latvia.
These figures display how dramatically pensions vary, with the highest amount more than ten times the lowest in Europe.
“Some EU countries are simply poorer than others and require families to subsidise the pension income of elderly relatives and support out.” Noel Whiteside, visiting professor at the University of Oxford, informed Euronews Business.
The EU’s four largest economies sit just above the EU average. Italy has the highest pension level among them, while Spain, France, and, Germany follow.
Pensions are also higher than the EU average in all five Nordic countries.
Retirement systems differ across Europe
“It is difficult to compare becaapply of the different pension systems,” Philippe Seidel Leroy, policy manager at AGE Platform Europe, informed Euronews Business.
Using Germany, Spain, France and Belgium as examples, he noted that these countries have large pay-as-you-go pensions, paid by the state, and much compacter occupational schemes that cover only certain sectors or employers.
“Their pension spconcludeing will be high per capita, becaapply the highest share of income of pensioners comes from these statutory schemes,” he added.
David Sinclair, chief executive of International Longevity Centre UK, emphasised that each nation’s pension architecture is a significant driver of variation.
“These design decisions, often shaped by political compromise and historical legacies, explain why two countries with similar age structures can conclude up with vastly different pension price tags,” he informed Euronews Business.
Purchasing power of pensions
The differences become much compacter when measured in purchasing power standards (PPS), which reflect the cost of living. One PPS unit purchases the same amount of goods and services in every countest.
Old-age pensions in PPS range from 6,658 in Bosnia and Herzegovina to 22,187 in Luxembourg. The highest-to-lowest ratio is only 3.3, compared with more than 10 in nominal terms.
Whiteside noted that in the ex-Eastern bloc countries, surviving privileges for pensioners — such as free health care, transport, and subsidised hoapplying — push up the PPS ratio. In other words, retirees obtain more for their money becaapply of these social benefits.
Spain and Turkey climb sharply in PPS rankings
The rankings of Spain and Turkey rise sharply once adjusted for purchasing power. Spain shifts from 13th place to 4th, while Turkey climbs from the last position, 34th, to 25th.
In contrast, Switzerland falls from 5th to 15th place, and Slovakia drops from 27th to 33rd, losing significant ground in the PPS rankings.
“The differences [in PPS] don’t disappear. That’s becaapply living standards in later life depconclude on more than pension transfers. Hoapplying costs, healthcare access, and opportunities for older workers all play a role,” Sinclair declared.
In the EU, pensionsequal about three-fifths of late-career earnings. In many countries, the rate drops below 50%, building it harder for retirees to maintain a decent standard of living. Pensioner povertyis a significant problem in many countries.
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