The UK has been ranked 11th in the latest international pensions ranking, according to a new report from actuarial firm Mercer.
While the Netherlands retains its top position, the UK has dropped from 10th to 11th place, marking a significant decline in its pension adequacy score.
The report evaluated 48 countries based on various factors, including coverage and expected income relative to salaries.
Notably, Chile in South America has overtaken the UK as it climbed up rankings.
The South American country now ranks ninth, with a score of 74.9, reflecting recent reforms to its pension system, including a mandatory 10% contribution rate for workplace pensions and a guaranteed state pension for all retirees.
In contrast, the UK’s score fell to 71.6 from 73, highlighting ongoing concerns about the adequacy of its pension scheme.
The Netherlands scored highest at 84.8, lauded for its “first-class and robust” pension system.
Iceland, Denmark, and Israel followed closely, all receiving similarly high scores.
These countries are recognised for their comprehensive coverage of both state and defined contribution pensions, often requiring retirement savings to begin disbursing at retirement age—something not mandated in the UK.
Despite this setback, the UK still performs well compared to other European nations, with France and Germany ranked 19th and 20th, respectively.
However, Spain and Italy lag behind, ranked 26th and 35th.
Mercer’s findings suggest that the UK could enhance its pension system by increasing contribution levels beyond the current 8% and reinstating a requirement for individuals to start drawing pensions at retirement age.
Additionally, improving coverage for self-employed individuals is recommended to bolster the overall system.
International Pensions Ranking:
1. Netherlands
2. Iceland
3. Denmark
4. Israel
5. Singapore
6. Australia
7. Finland
8. Norway
9. Chile
10. Sweden
11. UK
12. Switzerland
13. Uruguay
14. New Zealand
15. Belgium
16. Mexico
17. Canada
18. Ireland
19. France
20. Germany