Credit: STATEC

Luxembourg’s national statistics institute, STATEC, has published the 2025 edition of its Work and Social Cohesion Report, which analyses living standards, income inequality, poverty, and ageing in the Grand Duchy.

STATEC reported that in 2024, the average disposable income of Luxembourg households reached almost €7,700 per month, while the average standard of living stood at €4,900, confirming an improvement in purchasing power despite inflationary pressures in recent years.

Living Standards Improve Despite Inflation

STATEC noted that household living standards continued to rise in 2024, with purchasing power increasing despite price hikes recorded in 2022 and 2023. These findings are consistent with previous STATEC analyses, which had already highlighted improved purchasing power in the context of economic uncertainty.Persistent Income Inequalities

Disparities in living standards remain marked. In 2024, the top 20% of earners had a standard of living 4.7 times higher than the bottom 20%, and this ratio rose to 10.9 between the top 5% and the bottom 5%. The persistent poverty ratereached 6.1%, and rose to 26.9% when taking into account the “remaining disposable income” after mandatory expenses, which represent around 30% of household income - three quarters of which relate to housing.

Certain population groups remain more exposed to poverty, particularly children under eighteen, single-parent families, people of Portuguese or non-European nationality, and those with low education levels. In 2024, the monetary poverty rate was 18.1%, meaning that nearly one-fifth of the population lived with a monthly standard of living below €2,540 per person.

Multidimensional Precarity

In 2024, 20% of the population, around 130,000 people, faced poverty or social exclusion. This includes monetary poverty, severe material or social deprivation, or low work intensity within households.

In addition, 23% of households reported difficulties making ends meet, a figure exceeding one-third among people born in Portugal. Energy poverty affected 4.1% of households, a rate unchanged from 2023.

Ageing Population: A Growing Challenge

This year’s thematic section of the report focuses on the ageing population, which remains moderate but is rising (15% of residents aged 65 and over in 2024 compared with 21.6% in the EU-27). STATEC attributed this trend to a combination of lower fertility and longer life expectancy, partially offset by the inflow of young migrant workers.

Longer Careers but Early Retirement Still Common

The activity rate of 55-64 year olds has increased by 57% since 2004, and the average working life has lengthened from 30 to 35 years. Nevertheless, the average retirement age remains low at 60.4 years, below the EU average of 61.3 years, with many people leaving the labour market before the legal retirement age.

Contrasting Living Conditions Among Pensioners

In 2024, 5.6% of people aged 65 and over lived in institutional households, a share that increases with age. The feeling of disability becomes more common from age 70 and reaches 80% among people aged 95 and above.

While the average standard of living of pensioners is 14% higher than that of non-pensioners, one-quarter of them receive a pension below the legal minimum. These smaller pensions mainly affect women and foreign nationals, often linked to interrupted or low-skilled career paths. In most cases, such individuals live as couples, allowing them to compensate for their lower income through their partner’s higher pension.

The Work and Social Cohesion 2025 report also highlights less visible but important aspects of living conditions, including households’ perception of economic difficulties, housing burden, energy insecurity and disparities in retirement trajectories.

The full report (in French) is available on STATEC’s official website.