The year-after-year increase in living costs due to rising prices is likely to hit pensioners the hardest, as the gap between the average pension and the average salary is growing rapidly. The government is attempting to support purchasing power by increasing wages, while neglecting pension protection.

The latest official data show a continued decline in the replacement rate of old-age pensions in both urban and rural areas. The replacement rate is measured as the ratio between the average pension and the average income.

In 2020, the replacement rate for urban old-age pensions was 37.6%, but this has fallen sharply to 31.2% in 2024, a decline of 6.4 percentage points in five years. This means that retirees in cities receive less and less to compensate for the income they had during their active working period.

The same trend is observed in rural areas, where the replacement rate has fallen from 35.7% in 2020 to 29.7% in 2024. In 2023 and 2024, for the first time, this rate fell below 30%.

In 2024, the average gross monthly salary was Lek 79,500, an increase of 47% from 2020. The average urban pension in 2024 was Lek 19,609, an increase of 24% from 2020. This trend is particularly worrying in the context of an aging population and declining contributions to the social security system.

A lower replacement rate means that older people are facing major challenges in maintaining their standard of living after retirement. The decline in the replacement rate is an indicator of the weakening of the protective role of the public pension system.

In the absence of sustainable reforms, pensions are failing to maintain a sufficient link to real incomes and inflation, leaving retirees increasingly financially vulnerable.

The decline in the pension replacement rate has direct and significant consequences on the quality of life of pensioners, affecting economic, social, and health aspects.

The gap between the average salary and the average pension is not simply a financial issue, but a social problem with far-reaching consequences for the well-being of the elderly and the cohesion of society.

Maintaining an acceptable standard of living for pensioners is the clearest indicator of development and social justice in a country, Monitor reported.