Ageing populations How Europe's social contract has become a ticking timebomb

It has played a starring role in one of the worst periods of political turmoil in France since the 1960s.

- John Henley Paris Kate Connolly Berlin Sam Jones Madrid Miranda Bryant

In Germany, it threatens the future of the coalition government. In Spain, thousands have taken to the streets to demand change.The right to a decent state pension has been a central plank of the European social contract for decades, but people are living longer, birthrates are falling, and the continent’s pension systems are, increasingly, unsustainable. Most countries operate a “pay as you go” system, so when fewer people are contributing to schemes that have more drawing on them, and for longer, it becomes a problem fast. Occupational and private pensions now make up a sizeable part of retirees’ incomes in many countries. But state pensions remain a welfare cornerstone. Cutting payouts or raising the retirement age is unpopular - and politicians fight shy of reform. That is because the median European voter is now in their mid-40s and governments have a great deal to lose by penalising older generations. Only a few countries, including the Netherlands, have implemented major changes.

Most face growing shortfalls. Meanwhile, for 80% of EU pensioners, a state pension is their only income. About 15% are at risk of poverty.

France

Minimum state pension retirement age: 62 Monthly state pension (average): €1,500 Share of GDP represented by state pension: 13.4% Population over 65: 40.2% France’s pensioners earn, on average, fractionally more than people in work, thanks in part to a mandatory state pension that, for those with full contributions, pays out a maximum of 50% of previous salary (up to a certain limit).