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&#39State pension falling behind rest of world&#39

The UK state pension system is one of the least generous in the developed world, says pension tsar Adair Turner.

The head of the Pension Commission told last week&#39s National Association of Pensions Funds autumn conference that while this was not a problem five years ago because of the UK&#39s strong occupational pension coverage, over 60 per cent of defined-benefit schemes have now closed to new members.

Turner said the UK can no longer congratulate itself that it does not suffer from the same problems of continental European countries.

He claimed the UK&#39s pension problems are now similar to those of France, Sweden and the Netherlands although not as bad as Italy.

Turner said raising the retirement age for women to 65 means that the ratio of workers to retired people will not change drastically until 2020 but thereafter improvements in longevity and low birth rates will see a surge in pensioners as a proportion of the population.

Turner said: “We have one of the least generous state systems in the world. It delivers to the average Briton much less than continental European schemes but also much less than US social security, which for most Americans is the predominant source of retirement income.

“For all our talk of 401(k), in the US between 50 and 60 per cent of retired people in the US get cheques from social security.”

Hargreaves Lansdown pension research manager Tom McPhail says: “This will come as a big surprise to many people who have the vision of the US as a look-after-yourself society.”

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