The sustainability score of the UK’s pension system has fallen in the latest Marsh CFA Institute Global Pension Index, as researchers warn that government reforms will not be enough to address long-term challenges.
The UK ranked 14th out of 55 retirement income systems, down from 12th in 2025, with its overall score declining from 72.2 to 71.6. It retained a B grade. Its sustainability score fell from 63.2 to 62.4, earning a C+ grade, while adequacy declined from 75.9 to 75.6 and integrity from 79.0 to 78.0.
Marsh said that, while the Pension Schemes Act 2026 and the establishment of the Pensions Commission should contribute to better retirement outcomes, further changes would be needed.
Comparisons with international peers demonstrated the need for higher retirement saving levels and wider auto-enrolment coverage to improve both adequacy and sustainability.
The consultancy giant also suggested that the introduction of guided retirement, if implemented effectively, could improve retirement security by helping savers manage their pension savings throughout later life.
Sustainability challenges
The findings come amid wider debate about the long-term sustainability of the UK state pension.
Speaking at the Pensions UK Annual Conference last week, pensions minister Torsten Bell defended the government’s planned changes to the triple lock, arguing that reform was necessary to preserve the state pension without relying on further increases to the retirement age.
Torsten Bell on why the triple lock has to change
In his first industry address since the government’s triple lock announcement, the pensions minister framed the changes as part of a wider push to rebuild trust in the pension system and ensure that sustainability was not dependent on raising the state pension age. Read the full report.
Marsh also suggested that the potential changes to the triple lock could improve sustainability, alongside fiscal incentives to encourage the investment of patient, long-term pension capital in productive assets.
“Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements for the generations ahead.”
Christine Mahoney, Marsh
Globally, sustainability remained the weakest measure across the index, reflecting pressure from ageing populations, falling fertility rates and longer life expectancies.
The Netherlands retained the top position with an overall score of 85.8, followed by Denmark and Iceland. Australia joined the A-grade group for the first time, bringing the number of top-rated systems to six.
Christine Mahoney, global defined benefit and defined contribution leader at Marsh, said: “Pension systems are under real strain. Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements for the generations ahead.”
Seven priorities for pension reform
The 2026 Marsh CFA Institute Global Pension Index identified seven potential reforms to strengthen retirement income systems internationally:
- Extend pension coverage to include non-standard workers and the self-employed, recognising that many people will not save sufficiently without auto-enrolment or compulsion.
- Reduce early withdrawals to limit leakage from retirement savings before retirement, ensuring funds supported by pension tax relief are used to provide retirement income.
- Strengthen governance and transparency of private pension schemes to increase member confidence.
- Review retirement ages: Increase state pension and/or retirement ages in line with improvements in health-adjusted life expectancy to help contain the costs of publicly funded pensions.
- Support longer working lives by encouraging greater labour market participation among older workers, allowing people to save more and reducing the length of retirement.
- Increase private saving through encouraging higher saving both within and outside pensions to reduce future dependence on the state pension.
- Address pension inequalities via measures to reduce the gender pensions gap and disparities affecting minority groups.
