UK pension system ranks in bottom 10 of developed nations in new study

Analysis of pensions data from developed nations has revealed that the UK pension is ranked 25th out of 33 developed countries studied – far behind the number one nation Finland.

Using key metrics from pension systems around the world, such as average retirement age, pension contributions and public spending, the new research showed that Finland had the best pension system.

Its strengths included higher public expenditure on pensions and it found that almost 90 per cent of the population had paid into a pension scheme.

Poland followed closely behind thanks to the Government committing 11.2 per cent of GDP to pensions and having a state pension age of just 65. Poland also had one of the highest contribution rates at 22.5 per cent of a person’s regular income.

In comparison, the UK only saw public expenditure on pensions equal to 7.7 per cent of GDP and had the joint fifth oldest retirement age at 68.

The study also showed that less than half of the UK’s working population participated in a funded pension, of which combined pension contributions were only equal to 20.44 per cent of the average wage.

The country at the bottom of the list, Greece, only had 1.3 per cent of the working population participating in pension funds.

Across all of the countries studied the average retirement age was 66. However, Denmark had the highest retirement age at 74.

Italy saw the highest rate of pension contributions with workers putting away savings equal to 33 per cent of the average wage.

Link: UK pension system ‘falls short’ as Finland tops global pension rankings

Posted in Blog, Wealth Management News.