Ireland’s State Pension vs The Rest of the World.

Having to pay for housing in older age and in retirement can be financially demanding and can diminish the value of a pension payment.The value of cash transfers exclude the financial implications of, for example, housing or healthcare provision in the country. 

If you are older and have an illness or disability, the provision of healthcare and care can affect your finances. If you have to pay privately for medical care or medicines or purchase personal care, this will also erode the value of a pension payment.

Other available payments in that country such as energy payments or fuel payments to alleviate the risk of fuel poverty in older people are also excluded from pension amounts.

Another factor that affects the income of those in retirement is the tax treatment of pensions in the country in which they live or pay taxes.

However, here is some information about pension payments in various countries in the EU and further afield.

In Ireland, you can retire at age 66 and you can receive a state pension if you have social insurance contributions equivalent to 10 years. From January 2024, you can opt to work later and potentially receive higher pension payments.

The total number of social insurance contributions can be accounted for by time spent in employment or as a carer in the home.

The maximum state pension rate is €277.30 per week if you have made a yearly average of 48 contributions.

As in Ireland, the UK retirement age is 66, however you can choose to continue to work and receive higher payments when you retire.

In the UK, pension entitlement is based on National Insurance payments. You must make ‘qualifying contributions’ and contributions that may be credited to you when you were unable to work or caring for another. You must have the equivalent of 35 years of insurance contributions.

The full National State Pension payment for a single person is £203.85 ( €238.26) per week.

In Spain, the retirement age is 65 years and two months. You can retire with a full state pension with 37.5 years of social insurance contributions. 

Rates of pension payments are linked to your best 25 years’ earnings, whenever in your working life that these may have been.

There is a minimum, basic pension amount of €721.20 per month for low- income workers.

You can retire and receive an old age pension in Finland at the age of 65. 

The Finnish system is based on a basic pension and a guarantee pension, with a basic minimum of €976.59 per month.

This amount of pension you receive can be related to your earnings while in employment but there are no minimum contributions in the Finnish system.

In Hungary, there is an earnings related public pension, combined with a minimum pension. 

You can retire at 65 years in Hungary, and the pension you receive is a proportion of your earnings. You must have a minimum of 20 years of service.

The minimum pension is HUF 28,000 (€73.90) monthly or 65-70% of your current income.

You can retire in Bulgaria at 65 with 15 years of contributory service.

The minimum pension in Bulgaria is BGN 392.57 (€200.64) per month, with an average of BGN 573.76 (€293.25) per month.

In France a public pension has two mandatory components. There is a social security basic pension, and a supplementary pension.

The supplementary state pension is contributed to by workers, with plans specific to their occupation.

You can retire in France at 67 years old, with most pensions around 37.5% to 50% of the worker’s average annual earnings. The minimum pension is €634.66 per month.

The retirement age in Germany is 66. In Germany, there is a mandatory state pension insurance, as well as a voluntary occupational pension insurance. 

The amount paid is based on average salaries, with pension calculation based on a ‘pension point’ system based on earnings and length of working life.

For those who have had low earnings, or have relied on social security, there is a basic social pension, Grundsicherung, which is up to €432 per month.

In New Zealand, you can retire at 65 years of age.

The pension for a single person living alone is NZD 538.24 per week. This is equivalent to 40% of gross average earnings.

There is a residency condition to receive a pension in New Zealand with prospective recipients required to have lived in New Zealand for more than 10 years after the age of 20.

In the USA you may retire at 67 years. There is an earnings related social security pension, plus means tested top up benefit for low income pensioners.You must have made at least 10 years contributions.

The Supplemental Security Income, for those with low income and little assets, can be up to $10,092 per year.

However, while some states in the US pay only the minimum payments., different states can pay higher rates of pension than the minimum and payments vary between states.

In Brazil, private sector employees can retire at the age of 62 for women and 65 for men.  

Women must have made 15 years of contributions and men 20 years to qualify for a state pension. Contributions vary when in employment, depending on your income level.

There is also a social assistance programme for those who don’t qualify for retirement benefit or who have a disability. This is equivalent to the minimum wage, or BRL 1212 (€224.34) per month.

AS the figures suggest, there is wide disparity between pension rates from country to country, even within the EU. Hidden also in the pension figures is the issue of gender, with womens’ pensions affected by time spent outside of the paid workforce due to time spent caring for children or family members. 

In general, women accrue far less pension entitlements than men, although pension arrangements in some countries allow pension recipients to claim an additional payment for their spouse. In Ireland, pension recipients can claim an additional payment for their spouse as a ‘qualified adult’.

As people live longer, there are moves across the EU to increase the retirement age and to encourage workers to work for longer in their lives in order to be paid a higher pension payment when they retire. Ireland’s pension rules have changed to allow workers to remain at work until the age of 70 and receive a higher pension. These changes came into effect on 1st January 2024.

It has been estimated that a pension is the main source of income for almost ¼ of the population of the EU27 countries. Aging populations with less younger workers to contribute to the national pension fund will also mean that the availability of a state pension may not be guaranteed in the same way as it is currently into the future.