A new YouGov survey of six major European countries (Britain, France, Germany, Italy, Poland and Spain), as well as the USA found that the pension systems are increasingly unaffordable – but there’s little appetite for change.
The data shows that there is a recognition of the financial issues faced by pension systems across respondents in Europe and the USA.
Most people in France, Germany, Spain and Italy believe their country’s state pension system is already unaffordable, although this figure falls to 45% in Poland and 32-33% in the US and Britain.
When it comes to expectations for the cost of the pensions system by the time people who are currently in their 30s and 40s come to retire, the number thinking the system will be unaffordable rises near to or above the majority line in all countries (49-66%).
Those who are already retired are consistently more optimistic about their country’s ability to fund the state pension system. British pensioners stand out in particular, with 62% saying they think the UK state pension is affordable, compared to only 27% of their non-retired counterparts.
Despite the high costs of providing pensions, the majority in each country surveyed believe that the value of their national state pensions is too low (53-83%). This is particularly true among retired people (72-88%).
Consequently, it is perhaps no surprise that most Europeans who are not yet retired are lack confidence that they will be able to live comfortably once they do quit the workforce, ranging from 57% in Germany and Britain to fully 72% in Italy.
Push back against change
Despite a recognition of the challenges facing the state pensions system, there is limited support for actions that might help rectify the issue.
There is net opposition in all countries surveyed to each of the following proposals: raising the state pension age; increasing tax on working age people; introducing a legal obligation for working age children to financially support their retired parents; reducing funding for services for older people; and reducing the rate of the state pension.
The two most popular proposals are to introduce a legal requirement for working age people to additionally pay into a private or workplace pension, or savings plan; and to provide support for older workers to stay in their jobs for longer rather than retiring.
Some national quirks stand out. Italians prove particularly hostile to attempting to support older people to stay in the workforce for longer.
Italians are also particularly likely to support measures which place the burden of reform on the richest: 52% support removing the state pension for high income pensioners, 66% support increasing taxing more affluent pensioners to fund better state pensions for the poorest, and 55% say it is rich pensioners – rather than the working young – who should bear more responsibility for funding better state pensions for the poorest.
A legal requirement for working age people to pay additionally into a workplace/private pension or savings plan is particularly popular in Britain (57%), a country that already has a strong private pensions culture and where recent laws introduced an automatic system of payments into workplace pension schemes.
At the same time, Britons are notably less likely to support proposals for a legal obligation for children of working age to financially support their retired parents if they do not have enough money (12%).
While there is net opposition in all European countries for increasing immigration in order to widen the tax base, Americans are more pro-, although they are still relatively split (40-37%).
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