UK has worst state pension in the developed world

A study by the Organisation for Economic Cooperation and Development (OECD) has found that the state pension in Britain provides an income of just 29% of the average final salary.

This is the lowest percentage in the developed countries, with the average state pension percentage of salary in the other developed countries being 63%.

The population of the UK is living longer and there are high poverty levels among the over 75s. Francis O’Grady, General Secretary of the TUC, said about the OECD findings said:

“Working people in Britain face the biggest retirement cliff edge of any developed nation. We are letting down today’s workers if we can’t provide them with a decent retirement income.”

The OECD notes that the private pensions sector in Britain is performing well. Most workers are enrolled in workplace pensions schemes. The minimum contribution to a workplace pension scheme may not be enough for the financial aspirations of many people, but often schemes allow employees to pay more than the minimum. There are other investments products available, and private pension schemes for the self-employed.

The government may increase the minimum contribution level so that retired people receive more income.

When added to the state pension, private pensions schemes result in Britain’s having an average retirement income of 60% of their final salary, just short of the 63% average.

Here in the Wirral, a financial planning advisor can discuss investment products that can provide a decent retirement income.

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 INTERESTS AND TAX LEGISLATION.

Source used: https://www.theguardian.com/money/2017/dec/05/oecd-uk-has-lowest-state-pension-of-any-developed-country