French pensioners earn more than the working-age population

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I really ought to think more about retirement, or at least saving for it. I am far too young to stop working, but it creeps up on you. If you do not start putting money aside now, you risk being left impoverished in old age.

French pensioners enjoy remarkably comfortable incomes. That might sound reassuring, but in truth it is worrying. It highlights a gap. The older generation is locked into proper pensions, while younger cohorts are not.

CHART 1 • French pensioners earn more than the working age population

This chart tells a remarkable story. In France, pensioners now enjoy higher average incomes than the working age population, something not seen elsewhere in the developed world. On this measure, French retirees sit above the 100 line, meaning they are, on average, better off than people still in work. The contrast is stark when compared with countries like the UK, the Netherlands and Sweden, where retirees are significantly less well off than their younger counterparts.

The finding underlines how deeply pension systems shape the balance between generations. France has long been generous to its retirees, offering larger payments and earlier retirement ages than most. That generosity has tipped the scales so far that pensioners are now wealthier than workers. In most other advanced economies, from the US to Japan, the opposite holds true.

Source: Financial Times

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