Zaidi, Asghar

English

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EUROPEAN CENTRE • EUROPÄISCHES ZENTRUM • CENTRE EUROPÉEN
POLICY BRIEF AUGUST 2006
Poverty of Elderly People 
in EU25
by Asghar Zaidi
This policy brief on the elderly poverty in EU25 reviews the situation 
with respect to poverty of current populations of elderly people liv-
ing in 25 EU Member States. It sets out the base situation against which 
progress towards poverty reduction and social inclusion of the elderly is 
to be monitored.1 In the second policy brief on the same topic, we will 
provide an analysis of the possible impacts of recent pensions reforms on 
the future populations of the elderly.
  
How do we measure poverty 
amongst elderly?
We restrict ourselves to the ‘monetary’ aspects of personal well-be-
ing, using income as the measure of the ﬁnancial personal resources. In 
order to achieve consistency and international comparability of poverty 
statistics, the EUROSTAT New CRONOS database has been our main 
data source for the statistics. The Eurostat database is constructed using 
surveys such as the European Community Household Panel (ECHP), the 
EU Statistics on Income and Living Conditions (EU-SILC) survey and vari-
ous national household budget surveys. In spite of the differences of data 
sources, Eurostat has made every effort to use harmonised methods so as 
to insure the maximum comparability between deﬁnitions and concepts 
used in the different countries, and thus these poverty statistics provide 
the best possible comparative information on elderly poverty at the EU25 
level. Note, however, that these datasets include only private households, 
and exclude population groups such as those living in sheltered housing 
and institutions providing nursing and living care.2  
Asghar Zaidi is Director Research at the 
European Centre for Social Welfare 
Policy and Research, 
http://www.euro.centre.org/zaidi
The Project was supported by the 
European Commission under the 
Community Action Programm to 
Combat Social Exclusions
1 Neither the European Commission 
nor the organisations with which 
researchers are afﬁliated with 
carry any responsibility towards 
data used and interpretations made 
here in this document. 
2 For detailed discussion on concepts 
and methods used in measuring elderly 
poverty, see 
Zaidi, Makovec, Fuchs, Lipszyc, Lelkes, 
Rummel, Marin & De Vos (2006) 
“Poverty of Elderly People in EU25”, 
Report submitted to the European 
Commission.
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
2
What do we ﬁnd?
In the early years of the 21st century, about 13 million elderly people 
are at risk of poverty in 25 EU member States, amounting to as many as 
one-in-six of all 74 million elderly people living in EU. These results are 
calculated by using the 60% of median income poverty threshold for each 
respective country.  As is shown in Table 1, Cyprus, Ireland, Spain, Portugal, 
Greece and the United Kingdom are identiﬁed as the countries with the 
highest poverty risk for the elderly population. The new Member States 
are largely countries with the lowest risk of elderly poverty – the average 
poverty risk for the elderly in EU15 (19%) is more than twice as high as 
that observed for the elderly of the new Member States (9%). 
The above ﬁndings should be viewed with an understanding that the 
poverty thresholds against which the poverty situation in a country is 
measured are derived from the value of the national median income 
(standardised so as to take account of composition of households). Thus, 
the low poverty risk for the elderly in the new Member States is a reﬂec-
tion of the fact that the elderly income situation is not very different 
from that of the younger population. Another critical difference between 
the EU15 States and the 10 new Member States (NMS10) is that the life 
expectancy at birth in the NMS10 is about 6 years less than that in the 
EU15. While those aged 65+ are 17% of the population in the EU15 and 
just 13.6% in the EU10, the EU10 spend 10.9% of GDP on pensions, com-
pared to 10.6% spent by the EU15.  And, more crucially, the proportion of 
those aged 80+ is 2.6% in the NMS10 compared with 4.3% in the EU15.
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
3
Country Year at-risk-of-
poverty rate
(%)
Poor pop. 
(000)
Cyprus 2003 52 44
Ireland 2003 40 176
Spain 2003 30 2,112
Portugal 2003 29 504
Greece 2003 28 539
United Kingdom 2003 24 2,268
Belgium 2003 21 370
Malta 2000 20 9
Slovenia 2003 19 56
Austria 2003 17 213
Denmark 2003 17 135
Estonia 2003 17 37
Finland 2003 17 135
France 2003 16 1,561
Italy 2003 16 1,743
Germany 2003 15 2,167
Latvia 2003 14 52
Sweden 2003 14 215
Lithuania 2003 12 61
Slovakia 2003 11 68
Hungary 2003 10 156
Netherlands 2003 7 154
Luxembourg 2003 6 4
Poland 2003 6 294
Czech Republic 2002 4 57
EU 25 2003 18 13,350
EU 15 2003 19 12,156
New Member States 2003 9 902
Table 1: 
Proportion and number 
of elderly population 
(aged 65 and above) 
at risk of poverty 
in the EU Member States, 
using 60% of median income 
as the poverty line 
Source: 
Eurostat’s New Cronos Database
Notes: 
The year refers to the income year.
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
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What is the relative poverty risk 
for the elderly?
The results reported in Figure 1 compare the poverty risk for the elderly 
(65+) and the working-age individuals (aged 16-64), using the 60% of 
median income threshold. It also shows the relative poverty risk ratio of 
the elderly, calculated by dividing the at-risk-of-poverty rate of the elderly 
by that of the population aged 16-64. 
In 14 out of all 25 member countries, the elderly populations are more 
often at risk of being poor in comparison to the working-age popula-
tions. The relative risk of elderly poverty is particularly high in Cyprus, 
Ireland and Slovenia; in these countries the at-risk-of-poverty rates for 
the elderly are more than twice as high as the at-risk-of-poverty rates 
for the population aged 16-64. In Spain, Malta, Denmark, Finland, Portugal, 
Greece, the United Kingdom and Belgium, the elderly are between 1.5 
and 2 times as likely to be at risk of poverty, compared to the population 
aged 16-64. In Poland, the Czech Republic, Slovakia, Lithuania, Latvia, the 
Netherlands and Luxembourg, the elderly are better protected against 
the risk of poverty than the working-age individuals. In these countries, 
the at-risk-of-poverty rates for the elderly are less than 80% of the 
at-risk-of-poverty rates for the working-age individuals. In all countries 
categorised as the highest at-risk-of-poverty rate for the elderly (in Table 
1), the elderly are clearly more vulnerable than the working-age individu-
als in each country. In all countries with low at-risk-of-poverty rates for 
the elderly, the relative poverty risk ratio for the elderly is less than one. 
It remains to be seen to what extent this ranking of EU member coun-
tries is related to differences in the generosity of pension and social as-
sistance systems in place in the various countries. This is a subject matter 
which we address in our second policy brief  “Pension Policy in EU25 and 
its Possible Impact on Elderly Poverty”.
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
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Figure 1: 
Proportion of elderly and 
working age populations 
at risk of poverty
At-risk-of-poverty rates (%) 
PT 29 1.6
IT 16 0.9
SE 14 1.4
LU 6 0.5
15
0 5 10 15 20 25 30 35 40 45 50
Average EU 15
16-64
19
Average EU 15
65+
IE 40
elderly population
65+
non elderly population
16-64
2.4
2.0 65+ / 16-64 ratio
NL 7 0.6
FR 16 1.2
DE 15 1.1
FI 17 1.7
DK 17 1.5
BE 21 1.6
UK 24 1.6
1.6EL 28
ES 30 1.8
AT 17 1.5
15
SK 11 0.6
0 5 10 15 20 25 30 35 40 45 50
Average NMS
16-64
9
Average NMS
65+
CZ
PL
HU
LT
EE
SI
MT
CY
4
12
6
10
17
19
20
52
elderly population
65+
non elderly population
16-64
0.6
0.8
0.4
0.9
0.9
2.1
1.7
5.2
2.0 65+ / 16-64 ratio
LV 14 0.8
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
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Are there any differences across 
men and women?
Results depicted in Figure 2a show the differential poverty risks of 
male and female elderly, and results in Figure 2a also subdivide men and 
women between those aged 65-74 and those aged 75+. The latter ﬁgure 
is only available for the EU15 countries. 
In the majority of countries, the poverty risk is clearly higher for female 
elderly, more so in EU15 (21%) than in the new member countries (10%). 
In general, it can be seen that the poverty risk is higher for female elderly 
than for male elderly, and that the females aged 75 and over show the 
highest at-risk-of-poverty rates. Female elderly are more than twice as 
often at risk of being poor than male elderly in Sweden and in the former 
Eastern European member countries of Slovenia, Estonia, Lithuania, Latvia, 
Hungary and the Czech Republic.  With more than 10 percentage point 
difference, Ireland, Slovenia and Estonia also show a considerable gap be-
tween the at-risk-of-poverty rates for elderly males and females. On the 
other hand, in Portugal, Spain, Belgium, Malta, Denmark, France, Slovakia, 
the Netherlands and Luxembourg, the differences between the at-risk-of-
poverty rates of male and female elderly are relatively small.
On average, the at-risk-of-poverty rate for male elderly in the NMS10 is 
just 6%, compared to 10% for females in these Member States, 16% for 
male elderly in EU15 and 21% for female elderly in EU15. Note here that 
these and all the other results reported here are based on a country-spe-
ciﬁc relative poverty threshold, and the relative rankings of countries and 
population subgroups will change if a single poverty threshold is applied 
across all 25 countries.
The females aged 75 or more show the highest at-risk-of-poverty rate 
of the four groups considered on the basis of gender and age. In all EU15 
countries except for the Netherlands, the subgroup of females aged 75 
or above shows the highest at-risk-of-poverty rate of the four groups 
considered. With 63% the at-risk-of-poverty rate for females aged 75+ 
is particularly high in Ireland. In addition, Greece, Portugal, the United 
Kingdom,  Austria and Finland show at-risk-of-poverty rates of at least 
30% for females aged 75+. Next to the Netherlands, Germany and 
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
7
Luxembourg show the lowest at-risk-of poverty rates in this group. For 
males aged 75+, at-risk-of-poverty rates of 30% or more are only found 
in Ireland, Greece and Portugal, of which only the former two also have 
high at-risk-of-poverty rates for females aged 65-74 and only Greece has 
an at-risk-of-poverty rate of 30% for males aged 65-74. 
Figure 2a: 
Proportion of elderly popula-
tion at risk of poverty, 
using 60% of median income 
as the poverty line, by gender
At-risk-of-poverty rates (%)
Average EU 15
Men 65+
2116
Average EU 15
Women 65+
IE
PT
NL
FR
LU
SE
AT
DE
FI
IT
DK
BE
UK
GR
ES
Men 65+
Women 65+
0 5 15 20 25 30 35 40 4510
34
29
6
11
14
6
9
13
10
13
16
20
21
26
27
50
17
18
20
18
20
18
18
21
27
30
32
30
45
7
0 5 10 15 20 25 30 35 40 45 50
10
6
NMS 10
Women 65+
CZ
PL
HU
LV
LT
SK
EE
SI
MT
CY
1
5
4
6
7
11
7
11
19
48
Men 65+
Women 65+
6
7
12
17
15
22
23
21
55
NMS 10
Men 65+
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
8
Figure 2b: 
Proportion of elderly population 
at risk of poverty, 
using 60% of median income 
as the poverty line, 
by gender and age
(only for EU15 countries)
Average EU 15
Men 65-74
1514
Average EU 15
Men 75+
Men 65-74
Men 75+
0 5 10 15 20 25 30 35 40 45 50
ES 18
AT
DE
FI
IT
BE
UK
GR
11
7
16
22
15
30
NL
FR
LU
8
17
5
12
PT
IE
25
29
9
17
29
23
22
32
45
Average EU 15
Women 65-74
2217
Average EU 15
Women 75+
Women 65-74
Women 75+
0 5 10 15 20 25 30 35 40 45 50
63
AT
DE
FI
IT
BE
UK
GR
ES
PT
23
12
18
24
19
33
21
28
NL
FR
LU
6
17
7
28
IE 40
9
23
10
31
30
30
36
39
27
36
Asghar Zaidi • POVERTY OF ELDERLY PEOPLE IN EU25
POLICY BRIEF AUGUST 2006
9
The synthesizing conclusions are …
It can be surmised that the high poverty risk for females aged 75+ is 
related to the high proportion of widows in this age group. To the extent 
that younger cohorts of females will be more likely to be entitled to 
pensions related to their own earnings once they retire, the high poverty 
risk in this group may gradually become a thing of the past. Obviously, 
whether or not this will happen depends on the national pension systems 
as well as the long-term trends in the country-speciﬁc labour market 
participation patterns. These results also point to the problems linked 
with the adequacy of survivors’ beneﬁts that are currently available in the 
national pension systems. Moreover, the indexation of pension beneﬁts 
with prices (instead of earnings) in the majority of countries also leads 
to an erosion of the value of pension beneﬁts relative to the median. 
Since women live longer than men, the erosion of the value of pensions 
during old age will affect women more than men. One signiﬁcant policy 
development is that many countries have recently embarked on a further 
strengthening of their targeted minimum pension and social assistance 
schemes – this will have a positive impact on the reduction of poverty 
amongst the elderly, although the stigma associated with the means-test-
ed beneﬁts often induce non-take-up of such beneﬁts.
A word of caution here is that the current period of pension reforms 
in the majority of EU countries is driven mainly by increased concerns 
for the impact of ageing and a need for ﬁscal consolidation.  A common 
trend is that the pension beneﬁts drawn from the public pension systems 
are on the decline, and thus the average public pension beneﬁt ratio has 
dropped in the majority of the countries.  Moreover systematic reforms 
have changed the nature of pension provision from deﬁned beneﬁt type 
provisions to deﬁned contribution type provisions. In general, the changes 
are resulting in a more restrictive redistribution in favour of the lower in-
come individuals. Thus, in the absence of a behavioural response towards 
greater savings and more work during working lives, the risk of poverty 
for future elderly populations in EU countries will increase. 
POLICY BRIEF AUGUST 2006
EUROPEAN CENTRE • EUROPÄISCHES ZENTRUM • CENTRE EUROPÉEN
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Poverty of elderly people in EU25

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