The level of retirement income for UK pensioners must be improved, one retirement expert has said, following the results of the first Global Pension Index.
The new index, produced by HR consultancy Mercer, ranked the UK pensions system fifth best in the world. The index measured retirement income systems in terms of adequacy (how much income is available to a retiree), sustainability (based on participation in private pension plans and the level of pensions assets), and integrity (prudential regulation, governance, risk protection and communication).
The Netherlands came top with a score of 76.1 out of a maximum of 100. Australia followed with 74, then Sweden (73.5) and Canada (73.2).
Japan (41.5), China (48.0) and Germany (48.2) were the indexed countries with the lowest ranking retirement income systems.
John Betts, a worldwide partner in Mercer’s retirement business, said that while the UK system has some good features, major shortcomings need to be addressed to ensure its long-term sustainability.
“Improving the general level of retirement income for pensioners is one of the key actions that can be taken to enhance the UK system. With an ageing population that is putting an increasing amount of pressure on already-stretched government resources, it is essential to act on this.
“Practically, this could only be done in conjunction with increasing the retirement age and encouraging greater retirement flexibility.”