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OECD warns mandatory pensions fall short in 22 European countries
The OECD's Pensions Outlook 2026 estimates that mandatory pensions will fall below 70% of pay in 22 of the 30 European countries studied. Spain is one of eight exceptions for men on average wages, but its record life expectancy stretches the bill.
The report, published on 4 November, reaches an uncomfortable conclusion for much of Europe: in almost three quarters of the countries analysed, the state pension alone will not be enough to maintain living standards. The shortfall is measured in percentage points of pay and, at the top end, in more than €1,000 a month.
What happened
The OECD published its Pensions Outlook 2026, subtitled Are We Saving Enough for Retirement?, on 4 November. The report calculates the "contribution gap": the extra share of earnings an employee on an average wage would need to put into a voluntary plan, on top of mandatory contributions, to retire on 70% of gross pay. According to the analysis published by Euronews Business on 7 November, mandatory pensions will fall short in 22 of the 30 European countries studied.
The gap is in double digits in ten European countries: Ireland (19.4%), Poland (17.3%), Croatia (15.7%), Slovenia (12.5%), Latvia (12.3%), Estonia (12.2%), Switzerland (12.1%), Germany (11.1%), Belgium (10.7%) and Iceland (10%). Lithuania has the largest gap in the sample, at 20.7%, while Turkey has the smallest, at 0.4%. The UK sits at 9.1% and France at 6.2%.
In euros, the range is even wider. At 2025 average gross wages, a man on the average wage would need to set aside about €1,084 a month in Switzerland, €974 in Ireland, €716 in Iceland, €617 in Germany, €556 in Belgium and €532 in Norway. In the UK the figure is €494; in France, €238. The OECD stresses that the gap is not a poverty measure: it is the extra effort needed to reach a specific target, 70% of pay.
Eight countries are expected to meet that target through mandatory pensions for men on average wages: Austria, Denmark, Greece, Italy, Luxembourg, the Netherlands, Portugal and Spain. The report also notes that OECD pension fund assets reached USD 78 trillion at the end of 2025, equivalent to 106% of the club's GDP, up from 62% in 2001. Growth does not solve the problem: almost every country has some gap.
The experts quoted by Euronews Business stress the caveats. Professor Iain Clacher of the University of Leeds said: "Where gaps are large, this means that people are often under-saved, and so they won't have enough to have a good standard of living in retirement." Stéphanie Payet, a policy analyst at the OECD, said: "There is no universal retirement income objective." Traute Meyer of the University of Southampton warned that "voluntary retirement saving is insufficient, especially among lower earners".
The map: how long the pension must last
The map shows life expectancy at birth in 2023, using World Bank and WHO data. It does not measure the contribution gap or the size of pensions: it measures how many years, on average, a retirement must cover. That is the other half of the calculation the report makes with replacement rates.
Spain records 83.9 years, below Switzerland (84.2) but above Italy (83.4), France (82.8), Portugal (82.3) and Germany (81.0). Poland (78.3), Lithuania (77.3), Turkey (77.2) and Latvia (75.4) complete the list of countries cited in this article.
The comparison helps to qualify the headline. Switzerland has both the highest monthly gap and the highest life expectancy among the countries cited; Lithuania has the largest relative gap and a life expectancy more than six years below Spain's. Longevity alone does not explain the contribution shortfall: the rules of each system and the replacement rate matter more. What the map does add is time. Spain meets the 70% target for men on average wages and, at the same time, is one of the countries where the pension must be paid for the longest.
| Country | Gap | Life expectancy |
|---|---|---|
| Lithuania | 20.7% | 77.3 |
| Ireland | 19.4% | 82.8 |
| Poland | 17.3% | 78.3 |
| Switzerland | 12.1% | 84.2 |
| Germany | 11.1% | 81.0 |
| Spain | Meets target | 83.9 |
| Turkey | 0.4% | 77.2 |
What comes next
The nearest deadline is in Spain. On 1 January 2027 the transitional scale in Law 27/2011 ends: the ordinary retirement age rises to 67, except for workers with 38 years and six months of contributions, who can retire at 65. From the same date, receiving 100% of the regulatory base will require 37 years of contributions, up from 36 years and six months in 2026, according to the Social Security table.
The report sets no legislative calendar. Its projections assume that current rules remain in place until today's workers retire, and the OECD itself ties the outcome to decisions that have not yet been taken: raising mandatory contributions, encouraging employer contributions or expanding automatic enrolment. The debate will still be open when the generation now entering the labour market starts drawing its pension.
Sources
- OECD (4 November 2026): «Governments need to make greater use of asset-backed pensions to support retirement incomes, OECD says».
- OECD: Pensions Outlook 2026 — Are We Saving Enough for Retirement? (4 November 2026).
- Euronews Business (7 November 2026): «Are Europeans saving enough for retirement? Here is how much more they need to put aside».
- Social Security: requirements for the ordinary retirement pension and the gradual application table for the retirement age.
- World Bank: life expectancy at birth, total (indicator SP.DYN.LE00.IN). 2023 data used in the map.
Sources consulted on 8 November 2026.