France has long been seen from the outside as a place where people get to retire early and well. But recent protests have highlighted the gap between the promise and future reality.

Economists warn that France will be unable to resolve its debt crisis without tackling sky-high pension bills, and it must navigate a political minefield to do so. The UK faces a similar challenge.

France currently spends a massive 14 per cent of its GDP on pensions, and the costs are rising. The decision by President Emmanuel Macron in 2023 to curb spending by increasing the retirement age from 62 to 64 sparked riots and a national strike.

Meanwhile, recent moves to make budget savings through cuts elsewhere in society, such as on healthcare, education and the civil service, provoked mass protests and rioting across the country.

Falling birth rates coupled with rising life expectancy in France and the UK means pensions in both countries are putting pressure on public finances. The figures – and public fervour around the issue – are less extreme in the UK, but the bill for keeping an ageing population afloat is still a major concern, leading to moves to scrap the triple lock.

How each system works

The UK uses a hybrid model anchored by a flat-rate state pension, which is heavily backed by mandatory private and workplace pensions to which people are automatically enrolled. The state pension – which is currently capped at £12,548 a year, going up to £13,036 next year – is not meant to exist alone for most people.

In France, there is barely any reliance on private or workplace pensions, and nearly all retirement income is funnelled through mandatory public schemes. The core state pension in France guarantees up to 50 per cent of a worker’s average salary over the 25 years where they earned the most. This is topped up by mandatory occupational schemes to deliver a total net replacement rate of around 72 per cent.

As such, there has been less pressure in France to invest in a private pension.

Why pension burdens are becoming unsustainable

France’s pension system is cherished by its citizens and attempts to reform it face fierce opposition. But economists have warned that unless France takes action, it will struggle to end its debt crisis. Public debt in the country is approaching 120 per cent of GDP, raising doubt about its economic stability.

In the UK, public spending will be further strained next year as state pensions are set to get a 3.9 per cent boost. British debt is projected to reach around 95 per cent of GDP by the end of 2026.

Fraser Thorne, chief executive of investor relations group Edison, told The i Paper that while both countries can afford to grow old, neither can afford to ignore the maths indefinitely. “Both the UK and France have work to do,” he said. But “France’s position is the more acute”.

Thorne added: “What we’re seeing in both countries is the beginning of a long renegotiation between what was promised and what can actually be delivered.”

UK advantages over France

Britain’s state pension age is 66 and will be increasing to 67 in phases by 2028. These changes have met with some opposition but not the widespread anger seen in France.

Heidi Karjalainen, a senior research economist at the Institute for Fiscal Studies, said bigger private pension pots in the UK are making it easier to increase the state pension age. “If we think about the increase in the state pension age, that’s a tool governments across the world have used to try and reduce spending on the state pension,” she said. “In France, it’s been really difficult to do that.”

It’s this cushion that will help the UK better navigate the challenges that come with an ageing population and falling birth rates, Karjalainen suggested.

The value of individual contributions to personal pension schemes has risen steadily in the UK since 2016, with £15.9bn of individual contributions made to personal pensions in the 2024/25 financial year, up from £14.6bn a year earlier, according to the latest government figures.

“In France, if you make changes to the state pension, you’re affecting, for basically everyone, the age from which they can access their pension,” Karjalainen said. Whereas in the UK “people can still access their private pension from 55, although that’s going to now rise to 57”.

Giving time to adjust

Karjalainen also pointed to the time UK citizens have to prepare for changes, in contrast to France’s previously moves.

Thorne agreed, saying France’s process offers a “pointed lesson in what can happen when governments try to reset the terms of the pension contract: five prime ministers in two years, mass street protests and a reform ultimately diluted by political reality even when the economics were clear”.

But Thorne acknowledged that the political reality of pension reform is becoming harder everywhere “as younger generations grow more aware of what they are being asked to finance – and what they are unlikely to receive on the same terms”.

Karjalainen says cross-party agreements in both countries are now necessary to give citizens confidence that the system will remain stable. Otherwise younger people may doubt there will be a state pension waiting for them when they retire – and lose faith in the system altogether.

“You can’t have a pension system where things are just changing every parliament, because then people will lose confidence in it,” she added.