[Senior Trend] Europe's Aging Population, Retirement Age Extension, and Work

Senior Trends in Europe③

On the 20th, the Korea Institute for Health and Social Affairs (KIHASA) announced a research report titled "A Comparative Study of Public Perceptions on Aging and Pensions in 10 Countries," conducted in collaboration with overseas institutions. The study surveyed 1,500 to 2,000 adult men and women in each of the following countries: South Korea, the United Kingdom, Denmark, Italy, Sweden, Norway, Finland, Germany, Poland, and the United States. The survey focused on perceptions regarding retirement age extension, aging, pensions, and youth employment. There were differences among countries, with European nations generally not supportive of extending the retirement age. In South Korea, 41% agreed with extending the retirement age, which is three times the average of major overseas countries. Additionally, 44.8% of respondents expressed no intention of early retirement, about 20 percentage points higher than the 25% average across the 10 surveyed countries. According to KIHASA, "In South Korea, rapid aging reflects economic concerns and burdens, showing the highest social demand for extending the retirement age." This reveals anxiety caused by the unprecedented speed of aging in Korea.

Europe has long faced an aging society, making elderly employment and retirement age extension hot topics in each country. Due to the very high welfare levels for the elderly, the pension system has been shaken at its core by aging. Moreover, the overall labor force has decreased, and young people tend to avoid technical jobs, leading to natural discussions about extending retirement age starting with skilled field workers. More than half of EU member countries set the retirement age at 62, a result of gradual extensions. Governments have also evolved, but companies in Germany, Sweden, and Denmark have steadily increased senior employment. In the field, cases of people working beyond 70 years old are increasing. Particularly in Germany’s advanced industries, the role of skilled workers is crucial, so companies have introduced factory equipment, machinery, and spaces that help overcome physical frailty to enable these workers to continue working longer. Italy has actively encouraged women’s participation in society, although pension receipt is possible in the 60s.

Looking at pension amounts in major European countries, the UK state pension was up to ?179.60 per week (about 320,000 KRW, roughly 1.4 million KRW monthly) as of 2021, with many people having additional private pensions. In France, the average pension was 1,400 euros (2.08 million KRW) in 2021; Germany’s was 1,300 euros (1.93 million KRW); and Italy’s was 1,200 euros (1.78 million KRW). Sweden, known for its strong welfare state, had 17,000 kronor (2.23 million KRW). To respond to population aging, policies have gradually changed, including raising retirement ages, flexible retirement systems, and setting different retirement ages depending on specific occupations. On September 21, an online conference titled "Reversing Depopulation" was hosted by ACAP (Active Aging Consortium Asia Pacific). Although the main focus was on Japan and South Korea, many European participants also discussed immigration policies, women’s labor market participation, fertility recovery, and intergenerational vitality cases.

Meanwhile, recently in France, there were nationwide strikes and protests opposing the extension of the retirement age from 62 to 64 starting in 2030. Germany also planned to raise the retirement age from 66 to 67 over five years, but the process has been repeatedly delayed due to its overlap with pension receipt timing. While governments want to address pension depletion and labor shortages, citizens who value the "right to rest" are resisting. Switzerland has been conducting referendums on this issue, as it has one of the longest life expectancies among European countries. The life expectancy for babies born in 2020 was 83.1 years (South Korea 83.4 years). With an estimated 33% of the total population receiving pensions by 2050, Switzerland extended the retirement age to 65 for both men and women in September 2022. Earlier this year, a referendum on further extending the retirement age was held but was rejected by 74.5% of voters.

The diverse positions shown by Europeans offer implications for South Korea. In a long-lived society, responses vary depending on how "work" is perceived beyond pension issues. Especially in South Korea, despite financial anxieties, there are more senior generations willing to work longer than in European countries. As South Korea has one of the highest life expectancies globally, the elderly population will increase significantly. This is a massive trend that cannot be resolved by government welfare policies alone. It is necessary to transition all sectors?housing, health, employment?to be age-friendly from a business perspective, and socially coordinate with the younger generation who must share social costs, not with vague responses but with concrete preparations. The author believes that the senior generation themselves must prepare to be "lifelong active workers" for a healthy and safe old age.

Lee Boram, CEO of Third Age