Pensions are at the heart of budgetary and financial news with government plans to shift the indexation of pensions from January to July. In other words, it is a question of freezing the evolution of the amount of pensions for six months to reduce the cost for public finances. Obviously with a significant impact on the purchasing power of seniors, the revaluation of pensions being indexed to inflation.
This project was strongly criticized by the unions and part of the political class. Particularly on the grounds that retirees already suffer from a standard of living lower than that of working people. This is also what the majority of French people think according to several surveys: only 16% of our fellow citizens believe that retirees live better than the entire population (DREES survey).
The reality is more nuanced. On average, the disposable income of retirees represents only 79.3% of that of the French, according to the Drees. But this imbalance is more than offset by the absence of children to support and by income from assets: €377 per month compared to €262 for working people. Which is logical since, taking into account debts and loans, the overall wealth of retirees is 35% higher than that of active people.
A difference in assets in particular due to real estate, with the vast majority of retirees owning their main residence. Very often, they therefore pay neither credit nor rent. This is much more rarely the case for assets, whether they are owners or tenants. In addition, with the explosion in real estate prices in the 2000s, French people who were already homeowners at the time benefited from a mechanical increase in their assets. The value of many real estate properties notably doubled between 2000 and 2010.
As a result, the difference in income levels between retirees and workers is minimal. The latest annual report from Cor (Retirement Orientation Council) from last June, which covers the year 2021, estimates the average individual standard of living of retirees at €2,188 per month compared to €2,428 for active workers and €2,218 for all French people. And if we take into account housing expenses, retirees even have a standard of living equal to 105% of that of the French.
The difference is even smaller if we take into account the figures from INSEE: in 2022, the median standard of living for retirees was €1,994 per month compared to €2,028 for all French people. In other words, half of retirees had a standard of living above €1,994 per month.
Despite the income disparities that may exist between retirees, it should be noted that the government is not – for the moment – considering cost-saving measures targeting policyholders based on their pension level. If it were to be adopted in the finance law for 2025, the six-month postponement of the revaluation of basic pensions would in fact concern all retirees, regardless of income.
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