On the go: Team GB may have bagged an impressive haul of medals at the Tokyo Olympic Games, but the country is considered far from the best when it comes to its pensions system.
The UK was ranked a lowly 25th on a global pensions index compiled by wealth management adviser Blacktower Financial Management Group.
The index is based on metrics such as public expenditure on pensions, average retirement age, average pension contributions per capita, and the percentage of the population that has participated in available pension schemes.
The report revealed that the UK spends 7.7 per cent of its GDP on pension provision, compared with an average GDP expenditure of 8.8 per cent across the 33 countries that make up Blacktower’s global pensions index.
Less than half (49 per cent) of the UK working population participates in a funded pension scheme, compared with an average of 52.7 per cent of workers in the 33 countries in the index.
However, UK employees earmark around a fifth (20.4 per cent) of their average pay for pension contributions, equaling the average contribution rate.
The normal retirement age by type of pension scheme in the UK is 68 years, against an average retirement age of 66 across the 33 countries in the index.
The research revealed that Finland was the top-ranked country for pensions, with 89.8 per cent of its population participating in a funded pension scheme and workers contributing 24.4 per cent of their pay in pension contributions.
Following Finland, the next best countries for pensions are Poland and Sweden. Both boast an average retirement age of 65 and Sweden has a 100 per cent rate of its working population in funded pension schemes.
Poland also has one of the highest pension contribution rates, with 27.5 per cent of the average wage going towards pension contributions.
Across the 33 countries in the index, the lowest average retirement age of 62 is seen in Slovenia, Greece, Israel and Turkey.
Denmark has the highest retirement age in the index, with the average pensioner not retiring until age 74.
Some countries have significantly higher pension contribution rates than the UK, such as Italy, where 33 per cent of the average wage is earmarked for pension contributions.
Other countries where workers are contributing more to their pension funds include Spain, at 28.3 per cent, and the Czech Republic, at 28 per cent.
Commenting on the study, Gavin Pluck, group managing director at Blacktower Financial Management Group, said: “Our research reveals the world’s best countries for pension systems. This research is something to seriously consider when deciding which country to go live and work overseas.”
He added: “Inevitably, this will impact your future pension, meaning you may have to work for longer to fund your comfortable retirement depending on which country you live in.”
