• Polish pensions in a housing trap

    Post-89 Poles see property as investment: Flats in Warsaw. Photo: Maciej Jaźwiecki / Agencja Wyborcza.pl.

    It is an unpopular truth: in Poland, few people can count on a decent pension in the future.

    A decade ago, Minister of Economy Waldemar Pawlak said bluntly: “I don’t believe too much in state pensions. I try to secure my future through savings and a good relationship with my children. This will be more secure than these various state chimerical solutions.”

    The belief that the state will pay a decent pension after 1989 has never been particularly strong in Poland.

    Many Poles have taken matters into their own hands, just as the capitalist system had taught them to do. Knowing they won’t have a decent pension, they invested in the property market.

    After the fall of communism, pouring capital in real estate has become the national sport of Poles. Prices have risen at a tremendous rate, especially in Poland’s largest cities. Cheap loans have made it possible to buy a flat without a lot of capital. Many treated it as an investment. Some individual buyers had more than a dozen flats on credit. But this process has made another problem worse: access to housing.

    More and more flats were built, but as many as two million of them are standing empty. A large proportion of these are flats that people have bought as an investment, with a view to selling them off at a profit.

    As a result, rental prices have also risen. Today,only a small minority can afford a mortgage. Therefore, the majority of Poles will be condemned to whatever pension the state will offer them in the future.

    An even bleaker future awaits those who are currently entering the labour market. By 2060, they will barely receive the equivalent of 25% of their final salary as pensioners.

    This article is part of the "Tensions over pensions" edition
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