While Armenia does boast incredible architecture, rich history, vibrant cuisine, and stunning landscapes, its pension system may tell a different story.
Monthly payouts for pensioners are a staggering 13 times lower than the UK’s state pension.
In the 2024 European Pension Breakeven Index, Armenia ranked at the very bottom of the table (30th), offering the lowest state pensions.
With a monthly pension payment of just £74, Armenia’s pension system leaves its retirees struggling to make ends meet, according to Almond Financial.
The average monthly cost of living for a pensioner in Armenia is about £505.
This means that Armenian pensioners are receiving far less than half of what they need to cover basic living expenses.
The difference of over £400 highlights the stark reality that many retirees in Armenia will need to rely on additional income sources, as the state pension alone is insufficient to provide even a modest standard of living.
This is in sharp contrast to Luxembourg, which topped the Pension Breakeven Index with pensions being on average about £5,201 per month, which comfortably covers living expenses.
Armenia’s cumulative pension system, made mandatory in 2018, aims to improve retirement benefits by requiring both employees and the state to contribute a portion of earnings.
While it promises long-term benefits, the system leaves many retirees with insufficient savings, as most workers accumulate modest amounts over the years.
Although it has the potential for growth, some experts argue that better awareness and management are required for the system to be able to provide meaningful financial security for Armenia’s future retirees.
Principal Financial Adviser at Almond Financial, Sam Robinson, said about the findings of the ranking: “The data is an interesting insight into just how well people can live when they retire right across Europe.
He added: “Closer to home, the UK has a system that is just above the breakeven point which means at present, there isn’t much room to manoeuvre for those battling the cost of living crisis. And while it is positive that the UK finds itself among the top half of countries, for how much longer is the question.
“Although the increase in the state pension was well intended, it works out at just £33 more per month compared to last year’s pension. It’s clear that those over 66 need to look at other options rather than just relying on the state pension.”
“Planning for life after work is crucial and it’s important to seek advice from a pension advisor if you aren’t sure where to start.”
