Pension reform: bad news in perspective for the standard of living of seniors

What can French retirees expect for their standard of living in the years to come? The Court of Auditors has just responded in a report on our pension system published this day. And it is not very encouraging.

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With an average pension of 1,626 euros gross per month (i.e. 1,512 euros net) at the end of 2022, French retirees obviously have nothing to flare every day. For many of them, the gap between what they receive today and their last salary as an actor – we call it the replacement rate – is substantial. Only, even if it is not famous, this situation remains a little more enviable than that of the rest of the population, especially for the most precarious, with a lower poverty rate: 10% in retirees against 14.5% for The rest of the population, according to the latest report on DREES retirees (Directorate of Research, Studies, Evaluation and Statistics).

Furthermore, no longer having no dependent children and often affecting other income (rents, savings, etc.), the drop in their standard of living is amortized. Not to mention the financial advantage that the fact gives for many of them to be owners of their accommodation, with reimbursed loans.

What will he be in the coming years, taking into account the impact of the last pension reform, which came into force on September 1, 2023? According to the projections carried out by the CRO (Pension Orientation Council) published today in the “Flash” report of the Court of Auditors on “the financial situation and the prospects of our pension system”, the average pension of Retired should increase from 0.2% to 0.3% per year between 2025 and 2045. The standard of living of our seniors should therefore be maintained over time.

Draw on their savings or work longer

On the other hand, the evolution of pensions being slower than that of remuneration, the gap should increase with the assets. Let us recall that since 1993, the revaluation of pensions has not been indexed compared to that of wages but that of inflation. However, except during the recent period when prices flambé following the Covid crisis and the war in Ukraine, activity revenues are progressing normally faster than labels thanks to productivity gains. The replacement rate could thus decrease in the coming years to go below 50%. Always on average of course.

Another bad news, while it was higher than that of the rest of the population in the past, the average standard of living for retirees should now be permanently lower in the coming years, around 90%. The latter will have no choice but to draw on their savings to compensate … or work longer! Note that this situation should still remain better than that currently experienced with your neighbors, starting with Germany. Small consolation.