The UK’s state pension has been ranked the worst in the EU in a barometer report by an independent consultancy.
Aon Consulting found that an average UK earner retiring this year would receive just 17% of their salary in pension benefits. This is the lowest percentage in the EU, and far below the 57% average.
“The inadequacy of the UK state system is beyond question, with the UK showing last at almost every level of earnings,” said the report.
“Only for the lowest earners, where the Labour government has specifically targeted benefits, does the replacement rate start to approach other countries.”
It added that the UK has shifted responsibility for pension provision from the state towards employers and individuals.
“This attitude has been sustainable due to the slack being taken up in the private sector – the UK has the largest funded private system in Europe,” it added. “However, a spate of scandals, crises and legislative reaction has jeopardised this position, generating lack of confidence in the system among both employers and individuals.”
Despite its poor state pension, the UK moved up to fifth in the overall rankings, which take into account factors including private pension schemes and demographics.
Denmark topped the table overall, with the Netherlands second, Sweden third and Ireland fourth while Italy was bottom overall.