Where in the world are the best pension systems?
There are few people who would argue that Britain has the best pension system in the world - especially if they are trying to get by on a state pension, or making ends meet after being let down by a former employer's pension scheme.
So they may not be surprised that a report listing the ten best pension systems in the world places the UK very near the bottom of the list
The study was conducted by pension experts at Mercer, in Australia. It measured 25 retirement systems, looking at things like whether people had enough money in retirement, whether the system would be sustainable as time went on, and whether people had enough trust in the system to play their part.
What makes a system better?
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Depressingly it found that none of the systems were perfect, so no country could provide the solution for everyone else to follow. Every country was wrestling with the need to increase retirement ages, encourage people to work later, and save more for their own retirement. They were also battling big issues including rising life expectancies, increased government debt, and economic uncertainty.
However, there were certain common features of the best systems. Professor Deborah Ralston, Executive Director of the Australian Centre for Financial Studies, explained: "Although each country's retirement income system reflects a unique history, there are some common themes... the Index aims to highlight the best solutions and share them globally."
Among the common solutions were efforts to extend working lives by increasing the retirement age and encouraging people to work longer. Some countries were also using measures to improve pension saving, bringing more of the population into pensions, getting individuals and employees to contribute more, and having better funding for workplace schemes.
The lowly position of the UK gives us food for thought, but we can take some comfort from the fact that things could be worse. The study put other European countries even further down the list - with Germany in 11th place, Ireland in 12th, France in 14th and Italy in 19th out of a total of 25. The researchers classified the Italian system as one with "some desirable features, but also major weaknesses and omissions that need to be addressed." Without improvements, it said "its efficacy and sustainability are in doubt."
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