The UK has fallen to 14th place in the Marsh CFA Institute Global Pension Index, dropping from 12th last year and ranking behind Chile and Kuwait. The annual ranking, published by consultancy firm Marsh for the past 18 years, assesses pension systems based on resilience, retirement incomes, and the confidence of those who depend on them.
UK score and ranking decline
The UK received a score of 71.6 this year, after experiencing weaker economic growth and failing to improve on core pensions metrics at the same pace as other countries. In 2022, the UK ranked 10th. The Netherlands retained the top spot with a score of 85.8, with Denmark and Iceland ranking second and third. Chile took seventh place with a rating of 79.2, while Kuwait moved into 13th place with 72.9.
Report praises and recommendations
The report praised the size of Britain's private pension savings and the support provided to poorer retirees. However, it added that Britain's rating could be increased by reducing household debt, forcing retirees to take annuities, and increasing pension coverage across the workforce, particularly among the self-employed. Minimum pension contribution levels required under auto-enrolment rules, currently 5% for employees and 3% for employers, could also help the country rank higher.
Reactions from experts and minister
Phil Parkinson, of Marsh People & Investments UK, said: "We should be concerned at the pace at which other systems have shown improvement because they've affected reform at a scale that allowed them to move up the rankings, when the UK has effectively stood still. There's nothing fundamentally wrong in the UK and the Government has identified reforms, but this report shows those reforms are necessary and urgent. These would bolster our position and improve our score overall and the sustainability of the system if we took them at pace."
Pensions Minister Torsten Bell admitted that "right now, the system isn't setting everyone up for a comfortable retirement, and private sector workers deserve better than that."
