What is a pension?
Sending today’s work to your future self.
What you set aside while you work supports your life once you no longer can. And the balance between those who support and those supported is shifting around the world.
In 30 seconds
- A pension moves part of what you earn while working into your life after you stop working.
- Across OECD countries there are 33 people aged 65 and over for every 100 aged 20–64 (2025). By 2050 that is projected to reach 52.
- For someone who works a full career on average earnings, the future pension is 63% of net earnings on OECD average.
A transfer across time.
Part of what you earn while working is sent on to your future life.
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What a pension is
A pension is a way of receiving money in later life, once you stop working, based on what you paid in or set aside while you worked.
Its forms vary by country: schemes run by the state, schemes provided by employers, and savings you build yourself.
Those who support, and those supported.
The ratio of working-age people to older people is changing around the world.
People aged 65+ per 100 aged 20–64 across OECD countries, projected for 2050
33 in 2025, and 22 in 2000.
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Changing populations
According to the OECD, across its member countries there were 22 people aged 65 and over for every 100 aged 20–64 in 2000, and 33 in 2025. By 2050 there are projected to be 52.[1]
With fewer children born and people living longer, the weight on pension systems keeps growing.[1]
A little over six-tenths of your pay.
For a full career on average earnings, the future pension is 63% of net earnings.
OECD-average future pension as a share of net earnings (full career on average earnings)
Higher for people on half of average earnings. It differs widely by country.
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The replacement rate
The OECD calculates that people starting work today on average earnings, who work a full career, will receive a future pension of 63% of their net earnings (OECD average).[1]
It is higher for those on half of average earnings (76% in the release), while some countries fall below 40%.[1]
The OECD’s detailed chapter gives the net replacement rate from mandatory schemes today as 63.2% on OECD average.[2]
Know the system before you rely on it.
What will you receive from — the state, your employer, your own savings?
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Three pillars
State pensions, workplace pensions and personal savings. Which you will receive, how much and from when depends on your country and how you work.
Checking the projections and contribution records issued by your country’s pension body is a good first step.
A scale for reading the future.
A scale for reading pensions.
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How many support
How the ratio of working-age to older people changes.[1]
The replacement rate
What share of today’s net pay the future pension will be.[1][2]
Your own record
Which pensions you belong to, and what your projection is.
This is not advice
This edition explains how pensions work. It does not recommend any pension product or way of saving.
Next question
NEXT QUESTIONA little from everyone, holding up one.NEXT QUESTIONInterest brings more interest with it.See the Field Notes shelf →What this edition cannot tell you
- Pension systems and amounts by country. Check your country’s pension body.
- Projections for countries outside the OECD.