As people live longer, delaying retirement helps to maintain pension levels in a financially sustainable way. Declining fertility also puts pressure on pension systems by reducing the number of workers contributing to support a growing population of retired people. Such challenges can be tackled through increasing pension contribution rates, reducing pension benefits or delaying retirement. The OECD provides data on a wide range of relevant statistics and pension policies to inform people and policy makers about the available solutions and how suitable they are for each country.
Public pensions
As pension systems are under increasing pressure due to population ageing, reforms are needed to ensure both pension adequacy and the financial sustainability of pension systems. How this can be achieved differs by country and depends on both the design of the pension system and projected demographics.
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Pension entitlements
Whilst the gross replacement rate gives a clear indication of the design of the pension system, the net replacement matters more to individuals, as it refers to the percentage of a worker’s disposable income in retirement in comparison to when working. For average earners with a full career starting from age 22 in 2022, net income after retirement at the normal retirement age is 61.4% of pre-retirement income on average across the OECD. These net replacement rates vary from under 35% in Australia, Estonia and Lithuania to 90% or more in Greece, the Netherlands, Portugal and Türkiye.
Retirement ages
The OECD defines the normal retirement age (NRA) as the age of eligibility of all pension schemes combined without penalty, based on a full career from the age of 22. The 2022 average normal retirement age across OECD countries was equal to 63.6 years old for women and 64.4 years old for men. Future normal retirement ages will continue to rise, increasing to 66.3 for men and 65.8 for women on average across all OECD countries for those entering the labour market at age 22 in 2022. The normal retirement age for men will increase in 20 out of 38 OECD countries, and in 9 of them due to links of retirement ages to life expectancy. Three more countries are also reducing or eliminating the gender gap in retirement ages.
Populations are ageing rapidly
Populations have been ageing faster in recent years based on the old-age to working-age ratio. Over the last 30 years, the number of people older than 65 years old per 100 people of working age (20 to 64 years) increased from 21 in 1994 to 33 in 2024 on average across OECD countries. Over the next 30 years, it is expected to reach 55 per 100 people of working age. Although ageing trends are largely common across countries, one striking feature is the growing difference in projected ageing among OECD countries during the first half of the 21st century. The average pace of ageing is projected to be fast until about 2060, from when it is set to slow down substantially, but there is considerable uncertainty when projecting so far in the future.
