Across Europe, pension systems are feeling the ripple effects of a growing mental health crisis, and it is fast becoming an issue that the industry cannot afford to ignore, as pension providers and insurers are reporting steep increases in disability claims linked to stress, anxiety, and depression - particularly among younger workers.
As highlighted in European Pensions’ Autumn 2025 feature on disability pensions, many European markets are seeing a surge in mental health-related disability claims, with Haines Global Pensions’ overview revealing that, in countries where there is detailed diagnostic reporting, mental health conditions have become the leading cause of new disability awards.
The shift has been rapid. Not long ago, physical injuries and musculoskeletal disorders dominated claim statistics; today, psychological ill-health sits firmly at the top of the list.
The impact is also being felt on the provider level, as PFA head of strategic health, Rikke Bay Haaber, says that "the number of customers we help with mental challenges such as stress and anxiety has grown by 134 per cent since 2016".
Fresh data from Sampension, released to mark World Mental Health Day, paints a similar picture. Four in ten Danes say their everyday life negatively affects their mental health, jumping to 53 per cent among 18–34-year-olds.
Burnout seems to be a key culprit, as Sampension health manager, Nicoline Rosenlund, warns that today’s “always-on” lifestyle and digital habits are leaving young adults with little chance to recharge.
“If you just drive out there with the accelerator at full speed continuously, in the worst-case scenario, it could end up with you, for example, being affected by stress.”
But perhaps the most concerning trend is the age of those affected. Data from Elo recently revealed that mental health issues have driven a 37 per cent rise in under-35s claiming disability pensions. For an industry built on the assumption of long, continuous working lives, that’s a red flag, and a stark message for pension professionals.
If young workers are already struggling to sustain healthy participation in the labour market, the implications for contribution rates and long-term benefit sustainability are significant.
The growing gender gap in disability pensions adds another layer to this challenge. KLP’s recent report found that women remain far more likely to receive disability pensions, often due to stress-related or mental health conditions.
This imbalance reflects not just workplace inequality but broader social dynamics, from unequal care burdens to differences in how men and women seek (or avoid) medical help.
While some may say that this is not a pensions industry problem, the numbers coming out of Denmark illustrate just how significant this change has become: The Danish pension industry now pays out around DKK 10 billion each year in loss-of-earnings benefits — a striking reminder that mental well-being isn’t just a public health issue, it’s a financial one.
And even as providers report record profits, they are simultaneously contending with a rising tide of mental health-related claims, with a number of providers having recently highlighted this as an ongoing concern despite recent funding improvements and mitigation work.
This has prompted many to take a renewed focus on early intervention, as the sustainability of disability insurance models is increasingly tied to how effectively providers can help members stay healthy and connected to work in the first place.
AP Pension, for instance, has this week announced plans to partner with Headspace Denmark on plans to use early intervention to strengthen children's mental health.
Encouragingly, then, it seems that the industry is not standing still. Providers are taking increasingly proactive steps to address mental health before it leads to long-term absence.
This early intervention appears to be paying off. PFA, for instance, has used digital health solutions, AI-driven risk monitoring and workplace partnerships to reduce members’ risk of long-term illness by 70 per cent, while cutting two-year sick leave rates by 8.5 per cent.
“We know it can be difficult to take the first steps when you notice signs of unwellness,” Bay Haaber said. "That’s why we’ve made it easy to get help — through online solutions and proactive outreach, so that support is close at hand.”
PFA’s initiatives show how pension providers are broadening their remit. It’s no longer just about replacing lost income; it’s about helping members avoid long-term illness altogether.
For pension professionals, these trends raise pressing questions. How can schemes adapt to the rising cost of mental health-related disability? What role should pension funds play in early intervention and workplace well-being? And how can policy frameworks evolve to reflect the growing intersection between psychological health and retirement outcomes?
One thing is clear: mental health has become a core pension issue and one the industry cannot afford to ignore.
Disability costs are rising, claim profiles are changing, and the long-term viability of many benefits will depend on how effectively the industry responds.
World Mental Health Day offers a moment to reflect — not just on the wellbeing of members today, but on the sustainability of the systems designed to support them tomorrow. For Europe’s pension industry, investing in mental health is no longer a soft issue; it’s fundamental risk management.
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