When I was in holiday in Krakow, we were with another couple, one Spanish, one Polish, who met and married in London. They’re quite far off retirement and were talking about how hard, financially, it is for them to live and work in the city. Saving for retirement is not top of their list of priorities.
“I envy my parents in Spain”, my mate stated, as we sat in some cellar bar. “They are on the state pension. Both were teachers. They retired in their early sixties and receive 1,800 euros a month each.”
I checked the beer I was drinking to see if the alcohol level was so high that it was affecting my hearing. Or was it affecting my arithmetic, because I was calculating that at around 22 grand a year in Sterling, at current exchange rates. Net. Each. That couldn’t be right.
“You mean 1,800 euros between them, surely”, I said, before adding “which will soon stop once you aren’t getting £8 billion in subsidy every year from the UK!” (well, I thought it was funny.)
“No, no, no. That is 1,800 euros a month. EACH. It is a good arrangement.”
I was trying to get my head around this when his wife joined in. “It’s a good arrangement when you consider the average salary in Poland is 350 euros a month. So their pension is almost six times what the average Polish worker earns.”
“That can’t be right either”, I said. “That must be 350 euros a week”.
“No, no”, she tutted. “It is 350 euros a month.”
I decided, as in all pub arguments, to go into Google for a quick search to see who was pulling my leg. Seemingly neither of them were. The state pension level in Spain is over twenty grand a year. Greece isn’t far behind, and Sweden is actually ahead of this amount.
Average monthly salary is a bit more difficult, but the Wikipedia page I checked states the average monthly salary in Poland to be around 750 euros a month – but that’s in the “enterprise” sector. My Spanish friend had actually challenged his wife’s number at the time, and she had replied that her number was correct, if you took into account all wages, not just cities like Krakow. (There is quite a bit of evident wealth in Krakow, which was why I was also struggling to believe her assertion.) Either way, however, it’s a pretty low number.
Now, this blog post could go off in a variety of ways, but the way it’s not going is any further in the direction of Brexit. It was quite a shock to me, however, to have two friends whose families are experiencing two totally different financial worlds within the European Union. Obviously I’m “aware” that different countries within Europe have different standards of living, but talking to people who have a real, live experience of it is a different thing entirely. It must throw up some challenges – for starters, you can guess which half of the couple is sending money home to their parents every month, and which one isn’t.
It’s all very complicated, so much so that I’m not even sure what the point of this blog entry is. Originally I was going to muse over the size of the British state pension and whether or not it’s enough in comparison to Spain’s, but that’s a pretty puerile exercise. And anyway, I don’t have any of the other factors that might play a part In the argument – I’ve no idea what the Spanish tax system is, nor welfare system, nor National Insurance system (if they have one). As for comparing the average wage in Poland with that of the UK, really, what can you say?
Writing this post, however, has brought home to me just how astonishingly rich Britain is in the grand scheme of things. Okay, that wealth isn’t distributed fairly throughout the country and we could do a lot better at spreading it around, but that’s a massive debate that I hardly even have the energy to consider. Spread it around where, for a start? In Britain? Poland? Africa? It reminds me of the Mr Money Moustache post about how lucky we are to live the way we do and why we should stop and think about that sometimes. It might help put our “retirement dreams” into perspective.