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EU: Pensions become unsustainable as Europe grows old
EU member states need to readjust their pension systems in order to cope with increased life expectancy. At present, the old age dependency ratio in Europe (the ratio of working people to pensioners) is 4:1 though this is set to be 2:1 by 2060 if pension systems are not changed. The solution many countries are adopting is to raise the retirement age, to the dismay of workers. The European Commission accepts that each individual country is in control of its own pension system, but the EU “green paper” on pensions wants to harmonise them better.
With the choice between poorer pensioners, higher pension contributions and people working longer, a European Commission report considers the last option to be the best in order to avoid old-age dependency ratios rising steeply. However, less than 50% of people are still working over the age of 60, despite a member state agreement in 2002 to raise the age of retirement by 5 years.
Source: bbc.co.uk / 07.07.2010