View more on these topics

UK pensions among the lowest in OECD

The UK provides one of the lowest state pensions for employees on average earnings among developed countries.

A report by the Organisation for Economic Cooperation and Development places the UK 26th out of 30 member countries in terms of the percentage of after-tax earnings it pays to pensioners.

A worker on average wages can expect to receive 48 per cent of after-tax earnings compared with an average of 70 per cent in other countries.

The report takes into account the level at which pensions are paid, the age at which people become eligible to receive a pension, life expectancy and how pensions are adjus- ted after retirement to reflect growth in wages or prices.

Although described as complex, the UK state pension system fared better in other areas, being seen as cheap and helping to redistribute wealth.

The report found that nearly all OECD countries link pensions to prices, including the UK and says systems which adjust pensions in line with average earnings could cost the state 20 per cent more.

Hargreaves Lansdown head of pensions research Tom McPhail says: “This does not come as a surprise. The idea of a UK Government being generous with pension provision has been outdated for 20 years. Anything less than a fundamental rethink after the Turner report will be a failure.”

Recommended

Short in the act

Baring Asset Management London marketing director Ian Pascal on how Ucits III has opened the door for investors to short the market

Skandia offers active protection

Skandias protected portfolio investment range provides capital growth linked to an equally weighted portfolio of five externally managed funds with varying degrees of capital protection and return over a five year term.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com