UK pension provisions lagging behind in Western world

A report by finance company UBS has found that the standard UK pension is among the poorest in the developed world.

The report looked at the retirement prospects of a typical 50-year-old woman (called Jane in the report) living in various major cities in the developed world. The report assumed that Jane contributes the minimum required to mandatory pension schemes.

In the UK, Jane will receive a state pension and a workplace pension. In London, Jane would receive 41% of her final salary, but would be much better off in Singapore, where she would receive a retirement income of 73% of her current salary.

In Sydney, Australia, she would receive slightly less at 72%. Sydney is followed by Paris (69%), Milan (67%), New York (55%), Tokyo (55%), Munich (50%), Zurich (48%), and Toronto (42%). London, at 41%, is the same as Hong Kong but above Taipei (32%). This means that, compared to most cities in the developed world, London was near the bottom when looking at mandatory pension provisions.

If Jane at 50 had not yet made extra pensions savings, she would need to save 47% of her salary every month to have enough income for what the report describes as a “basic urban lifestyle.”

The report highlights the need to invest more in a pension scheme than the minimum required by law. The earlier a pension wealth management plan is put into action, the better a person’s retirement income. Locally, a pensions advisor can help formulate a pensions savings plan for Liverpool, Chester and Wirral residents.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation