UK pensions system graded B
First published on 15 of October 2014 • Updated 23 of January 2017
Find out where the UK pension system scores on the worldwide leader board.
The Melbourne Mercer Global Pensions Index, funded by the Australian Centre for financial studies, has released its sixth annual study into global pensions. The Melbourne Mercer study compares 25 different countries’ pensions system using a series of questions. They score each country under three key areas: ‘adequacy’, ‘sustainability’ and ‘integrity’ referring to retirement income systems and financial benefits.
The UK scored 67.6, which is graded B on their global scorecard for retirement savings – Category mates include: Switzerland, Canada, Singapore and Chile. A country with an index value of 65 – 80 (graded as B – B+), is a system that has a sound structure, with many good features, but has some areas for improvement.
The country who came out on top in the global pension’s race was Denmark – who scored an index value of 82.4 (graded as A), followed by Australia (79.9) and Netherlands (79.2). ‘A’ grade systems have an index value of 80+ which is a first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.
Through comparing each countries pensions system, the study has found trends within the global working systems:
- Many governments have now increased the retirement threshold, extending the age limit
- A rise in the 55 and over working in the labour force for most countries
Melbourne Mercer have also recommended ways in which countries can improve their pensions system. One of the major areas include ‘trust and transparency’ for real success in the pensions world.
Our own research shows that nearly half (43 per cent) of UK savers approaching retirement increase their retirement savings levels by £98 a month as a direct result of taking financial advice. With reforms to the pension system, hopefully the UK can achieve grade A on our nations’ pension system score sheet.
To read the full Melbourne Mercer research click here.