Pension gap

The problem


Estimated annual global pension gap

(Source: 2023 GFIA report "Global protection gaps and recommendations for bridging them")

Globally, ensuring a sustainable and adequate retirement income for all is a huge challenge. The global pension gap is estimated at US$1trn annually and is expected to grow even further.

Demographic change means the proportion of workers to retirees is falling in most countries. This impacts pay-as-you-go pension systems and means individuals need to save more for retirement.

This is not happening. More than a third of people in the EU are not saving for their retirement, according to a Insurance Europe’s third Pan-European Pension survey (see right).

The solutions

There is no single solution — individuals, national governments and the EU need to take action.

  • The EU and member states could promote multi-pillar pension systems, where insurers play a key role as providers of second- and third-pillar pensions.
  • Policymakers can encourage retirement saving through tax incentives, pension tracking services and auto-enrolment.
  • Governments and financial services companies can support initiatives to increase people’s financial literacy.

Pension gender gap

Women in Europe receive, on average, 29% less in retirement than men, mainly due to shorter careers, fewer hours and lower wages.

Insurance Europe’s third Pan-European Pension survey results confirm that there is a persistent gender gap in pension protection:

  • Almost half of female respondents were not saving anything for their retirement
  • Women tend to save less and expect to receive a lower percentage of their final salary in retirement than men
  • 27% of women is “not confident at all” that they will be able to maintain a comfortable standard of living post-retirement based on their mandatory public and occupational pensions, compared to 18% for men.

This is a significant issue for individuals, society and the economy.

This was discussed during 2023’s European Retirement Week and Insurance Europe also promotes pension saving through its InsureWisely financial literacy initiative.

How can we help?

We participate in European Retirement Week

Find out more about our #InsureWisely financial education initiative

Other resources

How can we cope with Europe’s demographic challenge?

1. Governments should introduce (or enhance) funded pension pillars (ie occupational and personal pensions) alongside the traditional PAYG statutory pension systems to improve their sustainability and the adequacy of retirement incomes.

2. The design of the multi-pillar system is key. To be successful, pension pillars must be mutually reinforcing and have clear roles and objectives (eg poverty prevention, income replacement).

How can we get people to save enough?

1. Policymakers should ensure that European citizens are informed about their expected future statutory pension entitlements.

2. Member states should take action to increase the uptake of supplementary pensions, introducing enrolment systems suited to local circumstances.

3. Member states should adopt tax configurations that incentivise citizens to save for the long-term, eg by deferring the point of taxation.

4. Member states should introduce or maintain tax incentives for supplementary pensions. These should be simple, stable over time and incentivise adequate saving over the long-term, eg by penalising early exit/surrender.

5. Digital distribution can increase private pension coverage and should not be hindered.

How can we get people to save well?

1. Savers should be informed about the importance of the asset mix in achieving their goals for income in retirement.

2. Policymakers and the insurance industry should work together to facilitate the offering by insurers of well-designed collective mutualised investment products for those savers that need them.

3. Solvency II’s treatment of long-term investments should move from a trading to a long-term approach, so that measurements are appropriate and not unnecessarily excessive.

4. Against the background of increasing longevity risk, policymakers must ensure that consumers can access decumulation products that best suit their needs, while reflecting national practices (eg life-long annuities, drawdowns, lump sums).

How can we get people to save wisely?

1. Financial education and awareness

a) The European Commission and member states should favour the adoption of national strategies for financial education and their inclusion in school curricula in order to develop financial literacy and responsibility from an early age.

b) A Commission-led European Day of Financial Education for sharing best practice and new approaches to financial education at national and EU level should be introduced.

c) EIOPA should review and coordinate financial literacy and education initiatives by national authorities.

2. Any EU initiative on pension product information should respect local market characteristics, be suitable for current and future distribution channels and be thoroughly tested with consumers. Consumers should be able to freely decide in which format they wish to receive the information and have equal access to both digital and paper means.


Fabienne Zwagemakers

Head of public affairs & communications
+32 2 896 48 30‬

Fabrizio Franco

Policy advisor, personal insurance & taxation
+32 2 894 30 14