Cyprus’ Ministry of Finance reported a broad-based improvement in the 2025 Financial Wellbeing Index, though citizens still face pressures from the high cost of living and concerns regarding retirement pension adequacy.

Positive Trajectory with Persistent Challenges

Cyprus' Ministry of Finance says the country's Financial Wellbeing Index improved in 2025 compared with the previous year, while acknowledging that significant challenges remain, particularly the rising cost of living and concerns over retirement adequacy.

Broad-Based Gains Across Indicator Metrics

In a statement issued following the publication of the latest Financial Wellbeing Institute survey, the Ministry said the index recorded an overall increase compared with 2024, with improvements across all 14 areas that make up the indicator, pointing to what it described as a broad-based strengthening of citizens' financial wellbeing.

Energy Crisis and Pension Concerns

At the same time, the Ministry noted that the survey highlights the difficulties still faced by part of the population, mainly as a result of the energy crisis and the higher cost of living. It added that the findings also reflect widespread concern among citizens about their retirement prospects and their ability to maintain an adequate standard of living after leaving the workforce.

Governmental Countermeasures and Tax Relief

The Ministry said the government has already implemented a series of measures aimed at mitigating the impact of rising prices and supporting households, recognising the challenges created by external economic factors. It also said the new tax framework is strengthening households' disposable income through revised tax brackets, a higher tax-free income threshold and additional tax relief for various categories of taxpayers.

Pension Reform and Promoting Financial Literacy

Regarding pensions, the Ministry said the government is proceeding with a reform of the pension system to safeguard its long-term sustainability while also improving the adequacy of pension benefits. Referring to the survey's findings, the Ministry stressed the need to further strengthen financial literacy among citizens in order to foster a stronger savings culture within households. The Ministry added that the government continuously monitors and evaluates key reports and studies on the state of the Cypriot economy as part of efforts to formulate sound economic and social policies for the benefit of citizens.

Source: CNA(ΚΥΠΕ)