Looking forward to a relaxing retirement? Then you'd better start saving now

Quarters, nickels, dimes and pennies are held a bowl Thursday, March 31, 2022, in Tigard, Ore.
Quarters, nickels, dimes and pennies are held a bowl Thursday, March 31, 2022, in Tigard, Ore. Copyright Spyros Tsakiris/AP
Copyright Spyros Tsakiris/AP
By Indrabati Lahiri
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More than one third of Europeans are still not saving enough for retirement, with about 40% saying that the current economic climate had eroded their pension contributions.


As the cost of living crisis continues to sweep through most European countries, several workers have seen their savings and pensions erode, including retirement savings. This has also led to many being forced to increase their retirement ages, in order to make up the gap and be able to stay afloat in an increasingly uncertain economy.

A new study by AgeCalculator.com, using Organisation for Economic Cooperation and Development (OECD) data gathered from between 2000 and 2020, shows that retirement ages in several European countries have risen significantly during this period.

Bulgaria takes the crown, showing a 13.26% rise, with retirement ages for both men and women having gone from 56 in 2000 to 63 in 2020. Estonia comes in at second place, with a surge of 11.93%, going up from 58 in 2000, to 65 in 2020. Latvia follows closely, up from 59 in 2000 to 65 in 2020.

Other east and central European countries such as Hungary, Romania and Slovenia also come further down the list. However, Western European countries have also been significantly hit, with Portugal seeing a 7.92% increase in retirement ages, and the Netherlands, a 7.65% increase.

Eastern Europeans retiring from work at a later age

An AgeCalculator.com spokesperson said in a press release: "The trend of retirement age increasing across many nations reflects a complex interplay of various factors. Some of these include the extension of people's life expectancy, which has increased, thanks to medical advancements, economic pressures that translate into people not being able to retire comfortably because of the rising cost of living and shifting demographics, such as declining birthrates and aging populations.

"It is interesting to see how the data shows European countries among those with a steadily increasing retirement age, with a particular focus on eastern European countries, as shown in the top 10.

"The first Western European country is Portugal, followed by the Netherlands in eighth place, and we have to look even further down, in 15th place, to find another Western country, Italy."

As retirement ages increase, this has also thrown more light on another key question: how much do Europeans have in retirement savings?

Are Europeans saving enough for retirement?

Several factors impact the amount of retirement savings European workers may have, such as the type of job they have, expenses, the country they live in, whether their workplace offers an occupational pension plan, as well as whether they also have a personal pension plan.

Back in 2017, the Schroders Global Investor Study, which surveyed about 22,000 people around the world, discovered that even established investors were not saving nearly enough for retirement, with Europeans at the bottom of the list.

At the time, Europeans were saving just about 9.9% of their salaries for retirement, with Asians saving 13%, and investors in the Americas saving 12.5% of their salaries for retirement.

Lesley-Ann Morgan, head of retirement at Schroders said on their website: "It's well-known that people aren't saving enough for retirement, but this study shows that even those who are already established investors are not putting away enough money.

"There's also a strong message from those who have already saved: 'I wish I had saved more.'

She added: "The study shows investors globally are only putting away 11.4% of their income but say they want to retire at age 60. Our analysis shows that someone who started saving for retirement at age 30 is likely to need savings of 15% and above a year if they wanted to retire on 50% of their salary."

Come 2023, and things are still looking a little gloomy for European pensioners, with more than one third of Europeans still not saving for retirement, according to a survey by Insurance Europe across 16,000 people in 15 European countries. This was among 44% of female and 34% of male respondents.

Not only that, but 40% of respondents have also revealed that the present economic climate, such as higher inflation, cost of living and economic uncertainty, had eroded the amount they were putting into their pension pots. 

The responses varied according to gender, age, marital status, employment and level of education. Some 35% of those saying they were not saving were self-employed, whereas 31% worked in the private sector and 32% in the public sector. The remaining 64% were unemployed.

Savings level depended on earlier education levels

Fifty-one percent of non-saving respondents said they had a low level of education, while 43% had a medium level and 37% had a high level of education. Some 45% of single people were non-savers, whereas 32% of married people were not saving. And 41% of widowers also said the same, as did 45% of divorced respondents.


Nicolas Jeanmart, head of personal and general insurance at Insurance Europe said on their website: "We need our pension systems to become fit for purpose and fit for the future, ensuring everyone has a good quality of life in their retirement.

"The reality is that, looking at the currently complex landscape, people will have to save more for retirement, but not everyone has enough money to do so. The industry is committed to playing its part in increasing protection. There is also a key role for policymakers. Our policy recommendations, based on the survey results, identify some ways forward."

So how much do Europeans really need to retire?

According to GoBankingRates, Northern European retirement savings average around €100,000, whereas people in Western Europe, including the UK, tend to save between €50,000 and €150,000. Southern Europe sees far less, with an average of between €20,000 and €70,000 saved for retirement. 

How much you need to retire in Europe varies significantly from country to country, with Western European countries being significantly more expensive than Eastern Europe.

Some Europeans may plan to leave the continent entirely and settle in other parts of the world, such as south-east Asia and the Caribbean, where their saved retirement income may go a lot further.


However, for those who plan to remain at home during their retirement years, Loretta Kilday, a spokesperson for Debt Consolidation Care estimates that a minimum of $500,000 to $1 million (€467,000 to €934,415) should be enough to live comfortably in retirement.

As reported by Yahoo Finance, she says: "More expensive countries, like Switzerland or Scandinavian nations may require closer to $1 million plus, whereas Portugal, Spain or Central and Eastern Europe may be doable with $500,000 to $750,000.

"Maintain an emergency fund of six to 12 months of total living expenses, in case of unexpected medical bills, family needs, etc. Keep this very liquid and accessible.

"Having ample liquid savings for emergencies and unexpected costs is key. Discretionary funds for travel and leisure are great to have, but secondary to the essentials."

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