Britain has slumped in the ranking of international pensions, a new index has revealed. The UK dropped from 12th to 14th place over the year, ranking behind Chile and Kuwait, according to the Marsh CFA Institute Global Pension Index. The consultancy firm Marsh has published the annual ranking for the past 18 years, rating countries’ pension systems based on resilience, retirement incomes and the confidence of those who depend on it.
The Netherlands retained the top spot with a score of 85.8, with Denmark and Iceland ranking second and third. Chile took seventh place with a rating of 79.2, while Kuwait moved into 13th place with 72.9. Meanwhile, the UK received a score of 71.6 this year after experiencing weaker economic growth and failing to improve on core pensions metrics at the same pace as other countries. In 2022, the UK ranked 10th.
The report praised the size of Britain’s private pension savings and the support provided to poorer retirees. However, it added Britain’s rating could be increased by reducing household debt, forcing retirees to take annuities and increasing pension coverage across the workforce, particularly among the self-employed, The Telegraph reports.
Minimum pension contribution levels required under auto-enrolment rules could also help the country rank higher, the report said. They are currently 5% for employees and 3% for employers.
Phil Parkinson, of Marsh People & Investments UK, said: “We should be concerned at the pace at which other systems have shown improvement because they’ve affected reform at a scale that allowed them to move up the rankings, when the UK has effectively stood still.
“There’s nothing fundamentally wrong in the UK and the Government has identified reforms, but this report shows those reforms are necessary and urgent.
“These would bolster our position and improve our score overall and the sustainability of the system if we took them at pace.”
Pensions Minister Torsten Bell admitted that “right now, the system isn’t setting everyone up for a comfortable retirement, and private sector workers deserve better than that.”
