Pension crises “will start to bite” over the next decade in super-ageing societies, according to the World Economic Forum’s (WEF) Global Risks Report 2025.

Super-ageing societies feature as a key theme in this year’s edition, which is linked to risks such as inequality and societal polarisation. A super-ageing society is when over 20 per cent of a country’s population is over 65 years old. Several countries have already exceeded that mark, such as Japan, Italy and Germany.

However, many more countries across Europe and Eastern Asia are projected to do so by 2035. Globally, the number of people aged 65 and older is expected to increase by 36 per cent, from 857 million in 2025 to 1.2 billion in 2035.

“Over the next decade the pensions crises and their implications will start hitting home in super-ageing societies, as it becomes clear that current state pension systems were designed for a much younger demographic with fewer years of retirement that needed funding,” the report noted.

However, the report identified that the second pillar of pensions will also struggle as a result of super-ageing societies, in addition to first pillar state pensions. This is because many countries are moving away from DB systems to DC systems, putting the onus on individuals to save for and manage their retirement income.

“For many people, this can be challenging as they may have insufficient income, lack the requisite financial understanding, or fail to make good early decisions about savings and retirement. As dependency ratios rise, fewer people will be contributing to employer and private pensions schemes relative to the number of people whose retirements need funding, and with the length of those retirements rising,” the report stated.

The WEF believes this will lead to increased pressure on institutional pension funds, some of which may seek to increase their returns by allocating higher proportions of their assets to riskier investments, such as crypto assets and private credit.

“These riskier investments will not always pay off, and over time this could worsen the already suboptimal funding ratios of some of these institutions. If there are extended periods of market underperformance, this could lead to many more individuals facing shortfalls in funding their retirement,” the report stated.

Furthermore, the report detailed how pension gaps will be exacerbated by the long-term impacts of the rise of the ‘gig economy’ and the associated failure to make sufficient pension contributions during periods of gig work.

“Pension shortfalls will also disproportionately affect lower-income workers who have not managed to make significant savings during their careers, even if they have been fully employed. In the EU, for example, already today one in five elderly people face the risk of poverty or social exclusion and this figure is set to rise by 2035,” the report said.

“Women on average have significantly higher pensions gaps than men given time taken out of formal employment over the course of their careers to care for children or elderly relatives, as well as their lower average pay compared to men. In the EU, women’s pensions are nearly 30 per cent lower than those of men, meaning that they are at a 35 per cent higher risk of poverty.”

A common solution for alleviating the pensions crisis in super-ageing societies is raising the statutory retirement age, a policy already adopted by several countries.

However, the WEF warned that attempts to do this face resistance from voters, a rising proportion of whom are themselves close to retirement.

“This segment of the population tends to have high voter turnout, making it increasingly likely that policy outcomes will be in their favour. Intergenerational tensions could become an ongoing feature of super-ageing societies, with discontented younger working cohorts resenting being called upon to pay more towards funding retiree pensions,” the report said.

It also warned that there is a gap between what global executives believe needs to be done to adjust pension schemes and what they view as businesses’ responsibilities. Indeed, 25 per cent of executives support policy changes to pension schemes and retirement ages, but a lower share (14 per cent) of executives view such measures as an effective business practice for expanding their talent base, as reported in WEF's Future of Jobs Report 2025.

“This illustrates the complexity of aligning key stakeholder interests behind pension reforms,” the report said.

This article was first published on our sister website, European Pensions.

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