Which countries offer the highest pensions?

Pensions are the main source of income for older people in Europe. About two thirds of their income in the EU comes from public transfers, mainly state pensions and benefits.

Despite this, people over 65 receive only about 86% of the average income of the overall population across 28 European countries.

According to the OECD, the ratio drops to below 70% in the Baltic states, and even falls under 80% in major economies such as Belgium, Denmark, and Switzerland.

To drill down further into these comparisons, it’s useful to look at the average gross annual old-age pension in the EU.

As of 2023, which is the most recent data available in late 2025, this total comes to €17,321 in the EU, equal to €1,443 gross per month, according to Eurostat.

Among 34 countries across Europe, the average annual pensions range from €3,377 in Turkey to €38,031 in Iceland. Among EU members, figures range from €4,479 in Bulgaria to €34,413 in Luxembourg.

At the bottom of the ranking, the average pension is also below €8,000 in Bosnia and Herzegovina, Serbia, Montenegro, Croatia, Slovakia, Romania, Lithuania, Hungary, and Latvia.

These figures show how dramatically pensions vary, with the highest amount more than ten times the lowest in Europe.

“Some EU countries are simply poorer than others and require families to subsidise the pension income of elderly relatives and help out.” Noel Whiteside, visiting professor at the University of Oxford, told Euronews Business.

The EU’s four largest economies sit just above the EU average. Italy has the highest pension level among them, while Spain, France, and, Germany follow.

Pensions are also higher than the EU average in all five Nordic countries.

“It is difficult to compare because of the different pension systems,” Philippe Seidel Leroy, policy manager at AGE Platform Europe, told Euronews Business.

Using Germany, Spain, France and Belgium as examples, he noted that these countries have large pay-as-you-go pensions, paid by the state, and much smaller occupational schemes that cover only certain sectors or employers.

“Their pension spending will be high per capita, because the highest share of income of pensioners comes from these statutory schemes,” he added.

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David Sinclair, chief executive of International Longevity Centre UK, emphasised that each nation’s pension architecture is a significant driver of variation.

“These design decisions, often shaped by political compromise and historical legacies, explain why two countries with similar age structures can end up with vastly different pension price tags,” he told Euronews Business.

The differences become much smaller when measured in purchasing power standards (PPS), which reflect the cost of living. One PPS unit buys the same amount of goods and services in every country.

Old-age pensions in PPS range from 6,658 in Bosnia and Herzegovina to 22,187 in Luxembourg. The highest-to-lowest ratio is only 3.3, compared with more than 10 in nominal terms.

Whiteside noted that in the ex-Eastern bloc countries, surviving privileges for pensioners — such as free health care, transport, and subsidised housing — push up the PPS ratio. In other words, retirees get more for their money because of these social benefits.

The rankings of Spain and Turkey rise sharply once adjusted for purchasing power. Spain moves from 13th place to 4th, while Turkey climbs from the last position, 34th, to 25th.

In contrast, Switzerland falls from 5th to 15th place, and Slovakia drops from 27th to 33rd, losing significant ground in the PPS rankings.

“The differences [in PPS] don’t disappear. That’s because living standards in later life depend on more than pension transfers. Housing costs, healthcare access, and opportunities for older workers all play a role,” Sinclair said.

In the EU, pensionsequal about three-fifths of late-career earnings. In many countries, the rate drops below 50%, making it harder for retirees to maintain a decent standard of living. Pensioner povertyis a significant problem in many countries.