EUROPE - Pensions and the Ageing Problem

Across Europe, politicians increasingly tout private pensions as a cure-all for reviving stagnant stock exchanges, fostering entrepreneurship and curbing ballooning public spending as populations age. But any governments that bet on this solution may be disappointed. A proliferation of individual piggybanks will not solve the deeper challenges that flow from having purchasing power ever-more concentrated in older hands.

According to the United Nations, Europe’s population aged 20 to 64 will shrink by 31% between now and 2100, while longer lifespans will increase the size of the over-65 population by 21%. Because of this shift, the National Transfer Accounts project estimates that older adults will go from consuming 30% of what the economy produces through labor—after subtracting that cohort’s own contribution—to 57% by 2100. In North America, the same numbers go from 25% to 52%.

Meanwhile, measures to keep people working longer are stalling. France’s parliament just suspended a plan to raise the retirement age to 64 from the current 62 years and nine months. And while Germany recently introduced tax breaks for those who choose to keep working beyond 67, it failed to address the underlying rise in early retirees.

All of this adds up to a budget problem, since taxpayers are on the hook to fund citizens’ retirement income in most European countries.

-www.reuters.com, 20 November 2025

Commentary: Europe is grappling with a problem that most high-income parts of the world are facing: what to do about ageing populations and the dwindling younger workforce to support them. As people seek a comfortable lifestyle from cradle to grave, they may be in for a rude awakening when pension funds run dry.

Christians must seek a higher calling than fretting about what will happen when one retires. Their priority is getting the gospel out as the Lord’s return draws ever closer: “And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be” (Matthew 24:39).