It is sometimes frustrating to report, every year, on something as unfailingly disappointing as the real return of European supplementary pensions. It is a feeling akin to that of a preacher in the desert. Then, someday, you read something from the European Commission which makes you hopeful:
People need to be able to access safe, efficient, transparent and high-performing pension products in order to build up sufficient retirement savings.
(European Commission 2025e, 1)
In the early days of 2025, the European Commission issued a programmatic document—a Competitiveness Compass (European Commission 2025a)—to state how it intends to meet the challenge of the competitiveness of the European economy highlighted by a series of high-level reports published in 2024 Noyer et al. (2024). Considering the centrality of capital markets in European economies, but also their underdevelopment compared to other regions of the world, this policy activism was sure to touch financial services regulation: The Commission then adopted a communication on a Savings and Investments Union (SIU), listing a number of measures it intends to adopt or propose to European Parliament and the Council—the co-legislator of the European Union (EU)—including measures to “support further uptake of supplementary pension schemes” (European Commission 2025b, 7).
After a public consultation over the summer, to which BETTER FINANCE responded on behalf of individual investors and pension savers (BETTER FINANCE 2025), the Commission adopted a “Supplementary pensions package” on November 20th, 2025, displaying a welcome concern for improving the outcome to pension savers.1 2026 will then be a busy year on the pensions front for BETTER FINANCE, as the co-legislators will examine these new proposals.
In the meantime, we deliver today a new edition of our annual “Will You Afford To Retire?” report, where we examine the real net return of a occupational and personal supplementary pensions across the EU.
What we do in this report?
In this report,
- We analyse 47 categories of long-term and pension savings products across 16 Member States: 2 public funded (Pillar I-bis), 20 occupational (Pillar II), 24 personal voluntary (Pillar III) and one category that mixes occupational and personal schemes.
- We adopt an investor-centric approach to measure the real net return of savings invested in long-term and pension savings products; the question we seek to answer is: “what is the current purchasing power of investments made up to 25 years ago in long-term investment and pension schemes?”
- We calculate net returns, i.e, the financial performance of investment after deducting all costs and charges levied by pension product managers on contributions and, annually, on accumulated assets.
- We then adjust these net returns for inflation, which erodes a little more of our savings with each year that passes, in order to determine the evolution of the purchasing power or real net return of long-term investments and pension savings.