**Aging Europe: Rising Costs Threaten EU Pensions**

Europe is facing a demographic crisis with over 20% of its population aged 65 or older, projected to reach a third by 2050. The World Health Organization indicates that 2024 will be the first year that Europeans aged 65 and older outnumber those under 15. Despite increased immigration, EU nations are in dire need of workers to sustain the public pension system, with projections showing less than two workers per retiree by 2050, compared to three currently.

Key points include:
– The annual public pension expenses exceed 10% of GDP in 17 EU countries, particularly in Western Europe, with Italy and Greece surpassing 16%.
– Governments are raising retirement ages to mitigate costs, resulting in protests, as seen in France, where the retirement age is pushed from 62 to 64. The UK plans to extend retirement to 68 by the mid-2040s.
– Many Europeans lack adequate personal or occupational pensions; only 23% have occupational plans, and 39% do not save for retirement at all, with significant dissatisfaction over low investment returns.
– Persistently low returns from pension plans, alongside high fees and inflation, have eroded savers’ purchasing power; nominal returns in 2022 fell from 8% to just 2% when adjusted for inflation.
– The EU’s introduction of the Pan-European Personal Pension Product (PEPP) in 2022 aims to address savings gaps, but it has seen limited adoption, with complexity cited as a barrier.
– Consumers are seeking more flexible pension investment options, paralleling the rise of straightforward investment platforms like Robinhood and eToro. Future policies may allow workers to invest state pension savings directly into the stock market.
– Experts warn that the shifting financial responsibility from public to private savings is leading to a potential decline in retirement quality for the next generation of Europeans, who may retire poorer and later than their predecessors.