The retirement age is rising all across Europe, but more and more Cypriots appear to be opting for early retirement instead, according to latest data by the Ministry of Labour.
The data indicates that more and more Cypriots do not reach the legal age of retirement which is 65 and opt for early retirement instead. In fact, six out of ten choose to leave their jobs earlier, that is, about 60% -65% of the beneficiaries of statutory pension retire at the age of 63. At the same time, the annual pension expenditure in 2016 amounted to €1 billion.
According to Social Insurance data, the minimum monthly pension is €355.74 for retirees with no dependents, €474.31 for those with one dependent, €533.60 for those with two dependents and €592.89 for those with three dependents. Pension expenditure accounts for the bulk of the country’s ageing costs, followed by age-related health care and other care services.
According to latest available data from Eurostat (2015), EU member states spend about 12.8% of GDP on public pensions, while 26% of the population are retired. The highest costs are in Greece (17.8%), Italy (16.5%), France (15%) and Denmark (13.5%). These are followed by Spain (12.6%) and Germany (11.8%). Cyprus is slightly lower at 10.8%. The lowest rates are recorded in Malta (7.6%) and Ireland (5.5%).
Meanwhile, life expectancy in our continent has increased significantly over the last six decades and infant mortality rate has shrunk due to better living conditions. According to Eurostat data, the average age was 42.8 years in 2017, increasing by 4.2 years compared to 2002. The elderly dependency rate, defined as the percentage of people over 65 (who do not work) to people aged 15-64 (the workforce), was 29.9% in the EU in early 2017.
According to Eurostat data, the average age was 42.8 years in 2017, increasing by 4.2 years compared to 2002. The elderly reliance rate, defined as the percentage of people over 65 (who do not work) to people aged 15-64 (the workforce), was 29.9% in the EU in early 2017.
The European Central Bank has recently raised the alarm over the elderly reliance rate, especially in the Eurozone, predicting that if there is no change in the demographic trend it will skyrocket from just over 30% today to 52% by 2070.
In addition, the rate older peoples’ reliance is expected to increase by more than 35 percentage points by 2070 in Cyprus, Portugal and Slovakia.
By Demetra Landou