Possible changes in pensioner support programmes in European countries in 2025

Pension systems in European countries are under pressure due to demographic changes such as ageing populations and declining birth rates. By 2025, many European countries will face the need to reform their pension support programmes to ensure financial sustainability and equitable distribution of resources between generations. In this article, we look at possible changes to pensioner support programmes in Europe by 2025.

Raising the retirement age

One of the key trends will be a further increase in the retirement age. Many European countries have already started this process, but it is expected to accelerate by 2025. The reasons are as follows:

Increasing life expectancy: Life expectancy in Europe continues to rise, leading to more people taking a pension for a longer period.

Lack of funding: Early retirement is becoming an unaffordable luxury for public budgets.

Forecast for 2025: The retirement age could be raised to 67-70 years in most European countries.

Introduction of flexible systems: e.g. the possibility to choose between early retirement (with a lower benefit) or later retirement (with an increased benefit).

Transition to mixed pension schemes

Many countries are rethinking their pension model, moving from fully public systems to mixed models, where a large part of the responsibility falls on employees and their employers.

The main areas of change are:

• Development of funded pension systems: State pensions may become basic, while the bulk of a pensioner's income will depend on savings in private funds.
• Mandatory participation in funded programmes: Some countries may make participation in funded pension funds mandatory for all working citizens.

Examples:

• Germany and France are already discussing strengthening the role of savings systems.
• Sweden and Finland may introduce new incentives for participation in voluntary pension programmes.

Digitalisation of services for pensioners

Digital transformation will also affect support systems for pensioners. By 2025, we can expect significant development of digital services aimed at simplifying access to social programmes and services.

Potential changes:

• Automatic data integration: The systems will automatically collect information on a citizen's labour activity to calculate the pension.

• Electronic applications: Most procedures related to the assignment of pensions will be transferred to electronic format.

• Personalised services: The use of artificial intelligence will make it possible to offer pensioners individual support plans (e.g. medical services or social benefits).

Examples:

• Norway and Denmark are actively developing digital infrastructure for retirees.
• In the UK, there are plans to introduce a unified digital platform for managing pension accounts.

Strengthening social support

Despite economic challenges, European countries will continue to focus on social protection of pensioners. However, the form of support may change.

Expected changes:

• Targeted assistance: Payments can only be targeted to pensioners whose income is below a certain level.
• Support for single pensioners: Increased assistance for single elderly people, especially those with insufficient savings.
• Subsidisation of public utilities: Possible reduction in the cost of housing and utilities for pensioners with low incomes.

Examples:

• Elderly poverty programmes may be strengthened in Greece and Spain.
• Germany is considering tax cuts for low-income pensioners.

Introduction of new forms of employment for pensioners

Given the labour shortages in some countries, governments may encourage retirees to continue working beyond retirement age.

Potential measures:

• Part-time employment: Pensioners will be able to combine their pension with part-time work.
• Tax relief: Tax relief may be available for pensioners who continue to work.
• Vocational retraining: Programmes to train pensioners for new jobs, especially in IT and health care.

Examples:

• The Netherlands already has gradual retirement programmes in place, which could be expanded by 2025.
• Switzerland is considering options to incentivise retirees to work through tax incentives.

Increased medical support

The health of pensioners remains one of the key areas of concern for the state. The following changes can be expected by 2025:

• Free health care: Increase the number of free services for older persons, especially in the area of chronic disease prevention.
• Telemedicine: Increased use of remote consultations for pensioners living in remote areas.
• Support for long-term care: Strengthen programmes to assist older persons in need of long-term care.

Examples:

• Finland and Sweden are developing telemedicine systems for the elderly.
• In Germany, funding programmes for home care for older people may be expanded.

Environmental initiatives for pensioners

As part of the global environmental agenda, European countries can offer retirees additional benefits for participating in green projects.

Ideas for implementation:

• Environmental technology incentives: Subsidies for the installation of solar panels or energy efficient equipment.
• Volunteer programmes: Pensioners will be able to receive additional payments for participating in environmental projects such as environmental clean-up or community development.

Examples:

• Norway already has programmes to support environmental initiatives for pensioners.
• In the UK, options are being considered to incentivise pensioners to use environmentally friendly transport.

International cooperation and harmonisation of rules

The European Union can strengthen efforts to harmonise pension systems between member states. This is particularly important for mobile workers who have experience of working in several countries.

Potential steps:

• Common rules for calculating pensions: Creating common mechanisms for calculating pension rights of citizens who have worked in different EU countries.
• Transfer of savings: Simplifying the procedure for transferring savings from one pension fund to another when moving between countries.

Examples:

• The European Commission is actively working on the creation of a unified system of pension rights for mobile workers.
• France and Germany could be pioneers in introducing new standards for the interaction of pension systems.

Change of approach to indexation of pensions

Pension indexation is an important mechanism for protecting the purchasing power of pensioners against inflation. However, the indexation methodology may change by 2025.

Expected changes:

• Link to real inflation: Indexation can be linked not only to general inflation, but also to inflation of goods and services most demanded by pensioners (e.g. medicines, foodstuffs).
• Accounting for regional differences: Different regions within the same country may have different indexation coefficients depending on the standard of living.

Examples:

• Italy may introduce special coefficients for regions with a high cost of living.
• In France, options for indexation to the specific needs of pensioners are being considered.

Development of long-term care programmes

An ageing population will increase the demand for long-term care services. By 2025, European countries could significantly expand support programmes for older people in need of ongoing care.

Potential measures:

• Funding for care: Increased state support for families providing care for elderly relatives.
• Development of social services: Expand the network of public and private institutions providing care services at home or in specialised centres.

Examples:

• Austria and Switzerland may strengthen social insurance programmes for the elderly.
• Denmark plans to develop networks of social workers to help single pensioners.

Conclusion

By 2025, pensioner support programmes in Europe will have undergone major changes. These changes will be aimed at adapting systems to new demographic and economic realities, as well as at ensuring a dignified life for older people. Key trends include raising the retirement age, developing contributory systems, strengthening social and health care support, and introducing digital technologies.

European governments are striving to find a balance between ensuring a decent life for pensioners and maintaining the financial sustainability of social security systems. The future belongs to flexible and innovative solutions that take into account the needs of each generation.