Long-term projections show that public pension spending is projected to increase in 24 OECD countries, for which information is available, and fall in 6 by the middle of the century. On average across 32 OECD countries, public pension expenditure would increase from 8.8% of GDP in 2023‑24 to 10.0% of GDP in 2050.
Pensions at a Glance 2025
OECD and G20 Indicators
The main driver of growing pension expenditures is demographic change. The projections shown in Table 8.4 are derived either from the European Commission’s 2024 Ageing Report – which covers the EU27 members plus Norway – or from countries’ own estimates. In the main table, data are presented forwards to 2060 for those countries where the figures are available. However, data are only available for 2030 for Switzerland and not available at all in five OECD countries.
Long-term projections are a crucial tool in planning pension policy: there is often a long time‑lag between when a pension reform occurs and when it begins to affect expenditure. There are some differences in the range of different programmes covered in the forecasts, reflecting the complexity and diversity of national retirement-income provision. For example, data for a number of countries include special schemes for public-sector workers. Similarly, projections can either include or exclude spending on resource‑tested benefits for retirees. The coverage of the data also differs from the OECD Social Expenditures Database (SOCX), from which the data on past spending trends in the previous two indicators were drawn. The numbers for 2023‑24 may differ between the SOCX database and the sources used here because of the different range of benefits covered and the definitions used.
Public pension spending is projected to grow from 8.8% of GDP to 10.0% of GDP by 2050 on average across all OECD‑32 countries, for which data are available across the entire timeframe. In the EU27, it is projected to increase from 9.9% of GDP in 2023 to 10.9% of GDP in 2050, after which it is projected to stabilise. This would be a significant achievement given the demographic change throughout the period. The indicator of the “Demographic Old-Age to Working-Age Ratio” in Chapter 6 shows a 69% increase in the number of people above age 65 per 100 people aged between 20 and 64 from 2024 until 2054. Legislated cuts in benefits for future retirees at least relative to wages, through lowered indexation and valorisation of benefit formulae, together with increases in the age at which individuals can first claim pension benefits, help limit the future growth in public pension expenditure.
Public pension expenditure is expected to increase in 24 OECD countries by 2050 (Figure 8.2). In Korea, the rapid increase reflects both the ageing process and the still maturing pension system. According to these projections, five countries would record an increase of about 3 percentage points or more of GDP: Hungary, Lithuania, Luxembourg, Slovenia and Spain. Conversely, Denmark, Latvia and Sweden would have a fall of around one percentage point of GDP.
Between 2050 and 2060 the OECD average only increases from 10.0% to 10.3%. However, in Costa Rica, expenditure is projected to increase by nearly 5 percentage points in just 10 years from 8.3% to 13.0%. This compares to an increase of 1.7 percentage points between 2023 and 2050. Luxembourg ranks next with an increase of 2.4 percentage points between 2050 and 2060. Conversely, Portugal (‑2.8 percentage points) and Italy (‑1.7 percentage points) are projected to see the biggest declines in expenditure.
Further reading
European Commission (2021), 2021 Ageing Report; Economic and budgetary projections for the 27 EU Member States (2019‑70), https://ec.europa.eu/info/publications/2021‑ageing-report-economic-and-budgetary-projections-eu-member-states‑2019‑70_en.
Note: EU27 figure is a simple average of member states. Pension schemes for civil servants and other public-sector workers are generally included in the calculations for EU member states: see European Commission (2024), 2024 Ageing Report.
Source: European Commission (2024), 2024 Ageing Report for all EU countries and Norway; Australia: 2023 Intergenerational Report (published August 2023), Chart 7.21; Canada: 16th Actuarial Report on the Old Age Security Program, 30th Actuarial Report of Canada Pension Plan, Actuarial Valuation of the Québec Pension Plan as at 31 December 2018 (QPP data for 2023, 2028 etc. has been used for 2025, 2030 etc.); Chile: Ministry of Finance; Costa Rica: SUPEN; Japan: 2024 Actuarial Valuation and the Financial Implications of the Reform Options; Korea: 2023 National Pension Actuarial Valuation Long-Term Actuarial Projection for the National Pension Scheme; New Zealand: New Zealand Superannuation Fund (NZSF) Contribution Rate Model – Budget Economic and Fiscal Update (BEFU) 2025; Switzerland: BSV – Financial perspectives of the AHV; United Kingdom: Office for Budget Responsibility; United States: The 2025 OASDI Trustees Report.
