The ‘ticking time bomb’ of state pensions across the western world has reached breaking point, with the majority of Europeans believing it is unaffordable to continue under the current system.
This is according to a new poll from YouGov that surveyed people across Britain, France, Germany, Italy, Poland, and Spain and found that most people believe state pension systems are unaffordable. Yet there is strong opposition to reforms that could solve the problem.
State pensions are a massive and increasing burden on government spending in these countries, where demographics are shifting towards an older, less productive population and a shrinking pool of workers paying the tax that funds state pension systems.
In countries like Britain, where pensioners enjoy a triple-lock that has seen the growth of their pensions payments outpace wages substantially, the threat of the system’s collapse or ‘bankruptcy’ is even more pronounced.
While the majority of those surveyed believe state pensions are unaffordable, Britain, the USA, and Poland are outliers, with a narrow majority of people believing the system is affordable.
However, there is a significant divide between the opinions of those who are retired and those who are working.
Professional, working-age Britons overwhelmingly believe the system is creaking, with only 27% stating the state pension is affordable. Of retired British pensioners surveyed, however, 62% say they think the UK state pension system is affordable.
In other countries surveyed, the majority opinion was that state pensions are unaffordable. In every country surveyed, including Britain, people said that without reforms, the state pension would be unaffordable by the time those who are currently in their 30s and 40s retire.
Most non-retired Europeans and Americans are not confident they will have enough money to live a comfortable retirement.
Despite widespread acknowledgement of state pension unaffordability, there is little appetite for reform. Most people surveyed still believe state pensions pay out too little. Retired people are the most likely to believe state pension payments are too low.
YouGov’s polling found that there is net opposition in all countries surveyed to proposals that could improve pension affordability, including increasing tax, introducing a legal obligation to support retired parents, reducing funding for services for older people, and reducing state pension payments.
“Comparing answers between the retired and not-retired shows differences you would typically expect based on self-interest,” YouGov said.
“For instance, those who are already retired are more likely to oppose lower pension payments or reducing government spending on services supporting older people, while those who are not retired are more likely to oppose raising the age limit for the state pension, raising taxes on working people, or reducing government services supporting people of working age.”
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