The Organisation for Economic Co-operation and Development published a working paper examining how governments can support retirement income while limiting pressure on public finances. It argues that policy should consider retirees’ wealth, particularly housing, alongside income and use means and asset tests to target public support toward those most in need. Public pensions account for about 18% of public spending on average across OECD countries. Drawing on selected country practices, the paper identifies annuities and reverse mortgages as potential complements to public pensions because they can convert financial and housing assets into retirement income. Uptake remains low because of limited consumer understanding, preferences for liquidity, high costs, market and longevity risks, and regulatory gaps. The paper highlights tax incentives, carefully designed default options, solvency rules, standardized disclosures and independent advice as possible supports for annuities. For reverse mortgages, it emphasizes clear legal frameworks, spousal protections, no negative equity guarantees and risk-pooling mechanisms, while noting that public guarantees can create contingent fiscal risks.
OECD2026-08-03
Organisation for Economic Co-operation and Development sets out income and wealth-based options to strengthen retirement security
The Organisation for Economic Co-operation and Development said retirement policy should consider wealth as well as income to better target public support. Annuities and reverse mortgages could supplement pensions by converting private assets into income, but remain underused because of consumer, market and regulatory barriers. Clear safeguards and advice could support uptake, although public guarantees may create fiscal risks.