A pension is not just a number on a payment slip. It is the answer to a question: will I be able to live with dignity when I stop working? And across Europe, the answers to that question differ dramatically — depending on which country you spent your working life in.
A study by payroll and HR management company Moorepay, covering 39 European countries, found that pension levels across Europe can differ by a factor of ten or more. Across 39 European countries, the ratio of pensions to the cost of living ranges from 22% in Georgia to 225% in Luxembourg.
At one end of the scale sit the undisputed leaders. In Luxembourg, the average state pension is €28,790 per year against a cost of living of €12,791 — meaning a pensioner lives at more than double the minimum threshold. Pensions also cover more than twice the cost of living in Italy (210%) and Finland (208%), with Spain (199%) and Denmark (189%) close behind.
In the middle tier sit countries where pensions cover 100 to 150% of the cost of living: Switzerland (131%), Ireland (126%), the United Kingdom (120%), Poland (112%), the Czech Republic (108%) and Greece (103%). Life here is still reasonably comfortable, if not lavish.
The highest pension payments are found in Denmark, Luxembourg and the Netherlands, where older people receive on average €6,700, €4,000 and €2,750 per month respectively.
In 20 of the 39 countries studied, the state pension is insufficient to cover the cost of living — and that is without factoring in housing costs. Add rent, and the picture becomes considerably grimmer.
Closest to the poverty line are the countries of Eastern Europe and the Balkans. The most difficult situations: Georgia (22%), Albania (29%), Ukraine (29%) and Moldova (42%). In these countries, the pension does not even cover half the cost of living.
Bosnia (53%), Cyprus (58%), North Macedonia (61%), Turkey (64%) and Latvia (65%) are also in a difficult position. In Eastern European and Baltic countries, pensions are even lower: the average monthly pension in Estonia is €569 and in Latvia €421.
On this map, Lithuania occupies a modest but not catastrophic position. The state pension covers 85% of the cost of living — excluding rent. This means: there is enough for basic necessities, but no margin for anything extra.
The average old-age pension has risen by around €73 since the start of 2025, reaching €673. The average pension for those who have the required length of service stands at €721.
Compared to regional neighbours: Estonia covers 91% of the cost of living, Latvia only 65%. Lithuania sits between its two Baltic neighbours.
According to economist Raul Eamets, despite the fact that Lithuanian pensioners' position remains slightly below the European average, in historical terms Lithuania is doing better than most countries with a similar history. "The Baltic states still lag behind Estonia and the Czech Republic, but Lithuania already looks better than Poland, Hungary, Slovakia, Romania and many others."
All the figures cited above represent living costs excluding housing rent. Yet rent in Vilnius is a very real expense for a significant portion of pensioners. Those who do not own their own home find themselves in a considerably more vulnerable position: pension income is simply not enough to cover both rent and living costs.
This is exactly why actual poverty levels among older people in countries with pension shortfalls are noticeably higher than the statistics suggest.
The gap between Luxembourg and Georgia is not simply a matter of state generosity. It reflects decades of economic development, GDP per capita, the structure of the pension system and a culture of private savings.
"Pension levels in Europe can differ by a factor of 10 when comparing averages. But this is normal, since GDP per capita and nominal wages also differ several times over, and in most countries pensions are linked to previous earnings," explains economist Raul Eamets.
The Scandinavian countries traditionally lead not only in pension size but in the overall quality of their social protection systems — healthcare, housing affordability and care for elderly people. A high pension in Finland or Denmark is the result of high taxes and high wages across an entire working life.
85% of the cost of living is not a tragedy. But it is not a comfortable retirement either. It means: you need to calculate, plan and not rely on the state alone.
Lithuania's second-pillar pension reform — the option to accumulate additional savings — is precisely why it became so important. And precisely why scammers became so active around it: wherever there is money and uncertainty, there are always those who want to exploit it.
For those who are only beginning their careers, the figures in this article carry a message: thinking about retirement is worth doing now, not at sixty. Private savings, second-pillar pension funds, investments — these are not luxuries. They are sensible preparation for the future.
The European pension gap will not disappear in the coming decades. But the decisions you make today will determine which part of that map you end up on.
Comments