How Much European Countries Spend per Pensioner

Based on Eurostat data from 2022, Visual Capitalist calculated the average amount of pensions issued per pensioner per year in 35 European economies and identified the countries that spend the most on it. The article also provides the share of spending in gross domestic product (GDP).

For reference, pension spending was determined by dividing the total pension payment by the number of pensioners. It is converted both into euros and into purchasing power standards (PPS), which are calculated taking into account the price level of each country.

As the data revealed, wealthy Western economies such as Iceland, Luxembourg, and Norway spend more than €30,000 per pensioner per year. The rise in the ranking of these countries is not only related to wealth, but also to solid pension systems — a mandatory savings model, a high-income population, and a diversified economy.

The top five of the ranking are completed by Denmark and Switzerland — both countries combine a universal basic pension with mandatory occupational pension schemes. Interestingly, despite these costs, the share of pensions in their budgets does not exceed 9% (much less than the EU average of 12.2% of GDP), which indicates that high taxes and efficient distribution are the basis for the sustainability of the system.

It is worth noting that Poland and Hungary spend a large proportion of their GDP on pensions, although a low tax base leaves the size of pensions below €7,000.

Italy, France and Spain spend 9-12% of GDP on pensions, but the amount allocated per pensioner often does not even reach €20,000. Although these amounts are increasing in local prices (PPS), it is still clear that sustainability is problematic. The reason for this, according to experts, is low demographic growth, a long-term pensioner, and a weak economic growth rate.