Health forecast to be biggest growth area in public costs.

Dr. Sch-W – 06/2018

The Ageing Report 2018 was compiled by the European Commission and the Council’s Economic Policy Committee (EPC). As in previous reports, pensions are only one area covered. It also looks at expenditure for health, long-term care, education and unemployment. 


As is always the case with long-term projections, their output depends on what was initially put in. The input that was particularly decisive for the Ageing Report involved assumptions about average economic growth within the EU, projected to be 1.4% and, in a more pessimistic scenario, only 1.1%.  

The key findings highlighted: 


  • The total cost of ageing is projected to increase by 1.7 percentage points to 26.7% of GDP between 2016 and 2070. However, there are considerable differences between the Member States. 


  • This increase is not attributable to the costs of public pensions; their contribution to spending will be even lower in 2070 than the initial year. 


  • The lion’s share of spending, at 2.1 percentage points, will come from age-related spending in the areas of long-term care and healthcare. 

Key message for Germany

The key message for Germany comes from the country-specific recommendations. There it is stated that pension spending in Germany will increase the most compared to other EU countries by 2070. At the same time, the projected decline in public pension adequacy is likely to increase the risk of old-age poverty, especially for low-income earners, people in non-standard work and people with career breaks.  

The Council criticised reversal of pension reforms

The Council released the report on 25 May. It also praised recent pension reforms in the majority of Member States, but at the same time criticised the fact that some of these reforms have been reversed. It explicitly advocates linking retirement age to life expectancy.