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Well-being of elderly people
Given that governments so far have been painstakingly striving to preserve the real value of pensions, poverty indicators of people at retirement age are not as alarming as those of younger cohorts. People take retirement at later and later times, while activity levels of the retired are increasing. The pension system is nevertheless not sustainable in the long term, partly due to demographic aging, partly because of shrinking savings options.
The poverty risk of the elderly population living in Hungary is significantly lower than the EU average. Furthermore, though poverty and inequality have significantly increased on the whole, thiis development was not as relevant in age group concerned. It is in this age group, however, that one could observe the most pronounced counter-cyclical effects of social security measures.
Retirement causes ever increasing revenue divisions. Pensions have nevertheless kept their real value, and the poverty risk for pensioners is lower than for other age groups.
The ratio of pension expenditure is relatively stable, while the number of elderly people at risk from poverty is increasing slightly. It will be necessary to improve the quality of services provided for the elderly as a result of demographic changes. Increasing low value pensions will also be required in order to the number the elderly exposed to the risk of poverty.
The state spent almost all the nationalized assets following the nationalization of private pension funds in 2010. Future retirement savings have therefore significantly decreased, without providing guarantees to citizens whose pension savings had previously been managed in individual accounts. The measure casts doubts on the long-term financial sustainability of the pension system.
The average age of retirement continues to grow in parallel with the statutory age limit. Hungary, the retirement age is nearly two years below the EU average, while both the expected lifespan and the number of years spent in good health fall behind the EU average. It should be noted that the results for 2013 will most likely break this trend, given the possibility for women with a work history exceeding 40 years to retire regardless of their age (provided they are at least above 55).
The employment rate for workers aged 55 to 64 is slowly increasing as the legal retirement age is also increasing. Currently Hungarian employment rate is just 12 percentage points below the EU average; however this is partly due to the fact that legal retirement age currently is below 64. A grade of 5 would be given if the rate came within a 10% range of the EU average after raising the legal retirement age over 64.
