EU Commission warns governments should consider hiking the pension age
COUNTRIES in the European Union may have to increase the retirement age to prevent a collapse of their social security systems as life expectancy increases and birth rates fall, the EU executive said yesterday.
Launching a debate on overhauling pension rules, the European Commission said pension systems would come under severe stress in coming decades.
“Unless people, as they live longer, also stay longer in employment, or start contributing to their pension earlier on in their working life, either pension adequacy is likely to suffer or an unsustainable rise in pension expenditure will occur,” the Commission said in a report.
The report, sent to 27 governments, said there were now four people of working age for every person aged over 65. But that ratio was expected to drop to only two for one by 2060 unless pension systems were overhauled.
The global economic crisis, followed by sovereign debt problems for some of the countries that use the euro, has highlighted how vulnerable the region’s public finances are.
“The choice we face is poorer pensioners, higher pension contributions or more people working more and longer,” EU employment and social affairs commissioner Laszlo Andor said yesterday.