their way of life will drop eightfold

In response to forecasts voiced within the European Fee report, by 2070 in nearly all European Union (EU) nations the dimensions of the typical state pension will probably be decreased in comparison with the typical wage obtained. On the identical time, the most important lower is predicted particularly for Latvia: if the present common state pension versus the typical wage in Latvia is 25.5%, then in 2070 the ratio of state pension to common wage will probably be nearly two instances decrease – solely 13.5%.

Which means that in Latvia, an individual who obtained a wage equal to the typical wage within the nation and didn’t save something further, upon retirement in 2070, will obtain solely a state pension within the quantity of 13.5% of his earlier wage, that’s, his way of life and monetary alternatives will probably be decreased by nearly eight instances. Changing these figures into euros, we get: in 2070, an individual receiving a wage of 1000 euros will solely have the ability to depend on a first-tier pension of 135 euros upon retirement! Evidently, you possibly can’t survive on that type of cash even now, particularly in 2070!

At the moment, the typical ratio of pensions to wages in EU nations is 43%, and by 2070 it can drop to 36%. This discount is because of the truth that there are increasingly pensioners in European nations, and fewer and fewer staff attributable to low delivery charges. These are precisely the identical developments which can be noticed in Latvia: now in Latvia one other one and a half staff with their taxes pay a first-level pension to at least one pensioner, and by the center of the century, following solely 25 years, the ratio will probably be one to at least one. The primary pension stage is shaped exactly from the social tax of working individuals.

Very important investments in demographic coverage, assist for households and enlargement of immigration gates can delay this second, however not fully stop it. The European Fee’s forecast for the way forward for the pension system relies on the idea that the pension coverage will stay unchanged. Subsequently, the European Fee notes that non-public accumulation of monetary assets for outdated age (i.e. 2nd and third pension ranges) is the principle approach to make sure not less than a suitable outdated age and replenish greater than modest state pensions.

Latvian newspaper