Lisbon, Nov. 27, 2025 (Lusa) - State spending on pensions currently accounts for 13% of GDP in Portugal, on a par with countries such as Austria (14.8%), France (13.8%) and Finland (13.7%), according to an OECD report released on Thursday.
In these three countries, state pensions account for between a quarter and a third of total public expenditure. In Portugal, they currently account for 27.3% of expenditure, according to the study "Pensions at a glance 2025" by the Organisation for Economic Co-operation and Development (OECD).
Greece and Italy are the OECD countries where pensions account for the largest share of state spending, reaching around 16% of GDP.
At the other end of the scale are Australia, Chile, Iceland, Ireland and South Korea, with spending on pensions below 4% of GDP, albeit for different reasons.
While Chile and Ireland have relatively young populations, in Australia and Iceland a significant portion of pensions is supported by private schemes and the retirement age, at 67 years old, is considered "high".
In Korea, the public social security system is "not yet consolidated" as it was only established in 1988.
On average, public pensions expenditure in the 38 OECD countries increased from 6.7% to 8.1% of GDP between 2000 and 2024, the last year analysed in the report.
However, in Portugal, Finland, Greece, Mexico and Spain, spending has risen by more than four percentage points of GDP since 2000, and by between two and four percentage points in Italy, Japan, Korea and Turkey.
In Portugal, the increase was around five percentage points of GDP, rising from 7.8% in 2000 to the current 13% of GDP.
On the other hand, public spending fell by more than one percentage point in Australia, Chile and Latvia, with Germany, Ireland, Lithuania and the United Kingdom also showing slight declines.
Despite the pressure of an ageing population, public spending on pensions is stable in 15 countries: Canada, Estonia, Germany, Hungary, Iceland, Ireland, Israel, Lithuania, the Netherlands, New Zealand, Poland, Slovenia, Sweden, Switzerland and the United Kingdom.
By 2050, the OECD forecasts that public pension expenditure will grow by between 8.8% and 10% of GDP on average across all 32 OECD countries.
In the EU27, it is projected to rise from 9.9% of GDP in 2023 to 10.9% of GDP in 2050, despite an estimated 69% increase in the number of people over 65 years old.
Portugal (-2.8 percentage points) and Italy (-1.7 percentage points) are the two countries expected to see the largest declines in public pension expenditure between 2050 and 2060, the cut-off year for OECD projections.
According to the report, private pension schemes are mandatory or achieve "near-universal coverage through labour relations agreements" in less than a third of the 38 OECD countries.
In the rest, voluntary private pensions are set up on an individual basis or are offered by the employer, meaning that "about half of OECD countries have private pensions" of some importance.
Iceland, Switzerland and the United States have the "highest flows of private pension payments", accounting for 5.2% and 5.7% of GDP. They are followed by Australia, Canada, the Netherlands and the United Kingdom, accounting for 3% to 4.5% of GDP, and Japan with 2.7% of GDP.
In Portugal, private pensions account for only 0.3% of GDP, one of the lowest figures among OECD countries.
In Iceland, private pensions account for 64% of total pension expenditure, while in Australia, Switzerland and the United States they account for 50% of the total. On average, the figure is 18% of total expenditure.
Total expenditure on both public and private pension schemes is highest in Italy, reaching 16.6% of GDP. Greece follows with 16.3%, Austria with 14.6% and France with 13.7%. In Portugal, it is 13.3% of GDP.
The average among OECD countries is 9.4% of GDP, with the lowest levels in Ireland, at 3.8% of GDP, and Korea, at 4.7%.
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