2025 European Pension Landscape: Comparing Amounts and Purchasing Power Across Countries

Primary Income Sources for Retirees Across Europe

According to Radiotrek — Світ: Pensions serve as the main income stream for older adults throughout Europe. Approximately two-thirds of pensioners' earnings within the European Union come from government transfers. As of 2025, individuals over 65 in 28 European countries receive around 86% of the average wage. However, this figure drops below 70% in the Baltic states. Belgium, Denmark, and Switzerland also report pensions at less than 80% of average income.

The average gross pension within the EU is about €1,443 per month. Among EU member states, annual pensions range significantly-from €4,479 in Bulgaria up to €34,413 in Luxembourg. In Turkey, pensions are notably lower, averaging roughly €3,377 per year or €281 monthly. The highest pension payments are found in Iceland, where the average reaches €38,031 annually, equivalent to €3,169 per month.

Country-by-Country Pension Disparities

Several countries have pensions below €8,000 per year, including:

• Bosnia and Herzegovina
• Serbia
• Montenegro
• Croatia
• Slovakia
• Romania
• Lithuania
• Hungary
• Latvia

On the other hand, the highest pension levels are found in:

• Iceland
• Luxembourg
• Denmark
• Norway
• Switzerland

It is important to note that when accounting for purchasing power parity, the gap in pension values between countries becomes less pronounced.

In Eastern European nations, retirees often benefit from free healthcare, public transportation, and housing subsidies, all of which enhance the effective value of their pensions. Countries leading in pension purchasing power include Luxembourg, Iceland, Austria, Spain, Norway, Italy, Denmark, the Netherlands, and Belgium. Conversely, Bosnia and Herzegovina records the lowest pension purchasing power as of 2025.

This data highlights the significant economic inequalities in pension systems across Europe.

While countries like Luxembourg and Iceland maintain consistently high pension levels, many Eastern European retirees face financial challenges. The strength of social welfare programs and state support plays a critical role in retirees' well-being, especially amid rising living costs and aging populations across the continent.