UK state pensions third worst in the world at under half the global average
Upcoming changes to state pension in 2022
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The state pension that Britons can expect offers them just 23 percent of pre-retirement income.
This made Britain the worst ranked first world country for its state pension.
When looking at total pension income, which includes private pensions, the data still makes for grim reading as only 28.5 percent of pre-retirement income is replaced.
Simon Lister, who authored the report, said: “I discovered that the UK has one of the lowest pension payouts in comparison to pre-retirement earnings, making it even more essential to start planning for retirement as early as possible.”
He said that no matter where someone is in their career, now is a good time to start thinking about retirement.
“Being prepared for the future could be the difference between living comfortably after retirement and having to tighten the purse strings when you should be enjoying post-work life”, he added.
A Government spokesperson told Express.co.uk: “It is not possible to make realistic comparisons internationally between State Pension levels due to differences between countries such as tax and healthcare systems, access to occupational pensions and the availability of other welfare benefits.
“The UK basic State Pension is now over £2,050 a year higher in cash terms than a decade ago and since Automatic Enrolment was introduced in the UK, more than 10 million workers have been enrolled into a workplace pension.”
Only Mexico and South Africa lagged behind Britain in the rankings.
When it came to the breakdown by age, it is clear that the age range with the highest pension enrolment is those aged 40-49, 84.3 percent of whom are enrolled.
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The 16-21 age range expectedly had the lowest enrolment rate, likely because the bulk of these employees will be working part-time and earning low wages.
This means they are unlikely to meet the £10,000 threshold for auto-enrolment.
Generally, those aged 30-59 are the most likely to put seven percent of their income or more into their pension, with less contributed either side of this age bracket.
When it came to employers and their pension contributions for workers, most pay in at the minimum rate of three percent of wages, although nearly 12 percent offer a huge contribution of 20 percent or over.
With just 23.6 percent of pre-retirement earnings made up, Mexico languished at the bottom of the ranking and with a 27.9 percent replacement rate, South Africa fared little better.
On the other side of the analysis, the top five countries for pension income each have replacement rates of over 90 percent.
India topped the list with a remarkable 93.3 percent of pre-retirement income replaced by retirement incom
As the government spokesperson said, it should be noted that Indian pensioners are likely to receive far less in other ways in retirement.
For example, state-funded welfare is not at the levels which British retirees can expect.
Italy, Turkey, Bulgaria and Luxembourg rounded off the top five spots.
The study looked at a variety of factors to rank state pensions around the world. It examined enrolment rates, the amount of pre-retirement income that pensions replace and gave a breakdown by age and occupation.
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