For several decades, policy makers in China and the EU have stated that their ageing societies are a burden for their pension systems and that the retirement age should be increased and costs strictly controlled. But is pension retrenchment the only viable response to societal ageing? This is one of the central questions that this study asks.

Despite the understandable worry about the increasingly grey population in both regions and the challenge this poses to maintaining financial sustainability of pensions systems, the study’s authors (Prof Traute Meyer of the University of Southampton and Prof Feng Jin from Fudan University) argue that the strong focus of policy makers on the extension of working life to contain these costs is misguided.

In their analysis, they explain that labour market reforms and improved education and employment opportunities would help to financially shore up pension systems. Pension systems exist because ageing populations are an integral part of developed economies and policy-makers should embrace the trend. Instead of simply expecting people to work longer, they should address the inequalities and obstacles preventing citizens from rewarding involvement in the economy and thus contributing to pension systems. This study outlines the current challenges of these systems in Europe and China and proposed some new approaches to address them.