State pension ‘not enough’ to retire on says financial advisor
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Pension issues have plagued the UK Government for years now, with British state pensions routinely condemned as among the worst in Europe. New research on this topic has actually highlighted British state pensions as among one of the worst in the world.
A new report by Blacktower Financial Management Group showed the world’s best state pension systems in 2021, based on various factors including average retirement age and contributions.
Blacktower Financial Management Group analysed global state pension systems based on a range of measures such as public expenditure on pensions, normal retirement age by type of pension scheme, pension contributions as a percentage of average wage and participation in funded pensions as a percentage of the working population.
Based on these parameters the “beautiful Nordic state of Finland” emerged as the country with the best pension system in the world.
Unfortunately, the UK didn’t even make the top 20.
The top 15 countries for the best pension systems globally can be found below in descending order:
- Czech Republic
The UK ranked 25th on the list.
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Gavin Pluck, the Group Managing Director at Blacktower Financial Management, commented: “Our research reveals the world’s best countries for pension systems, this research is something to seriously consider when deciding which country to go live and work overseas.
“Inevitably, this will impact your future pension, meaning you may have to work for longer to fund your comfortable retirement depending on which country you live in.”
Mr Pluck continued by examining what needs to happen in the UK for its pension prospects to improve: “As a G7 member, you would expect UK retirees to enjoy a bountiful pension.
“Unfortunately, positioned at a very humble 25th place, the UK’s pension system flatlines with the global average.
“This study couldn’t have come at a more heated time as the 2011’s triple-lock on UK pensions against inflation has been placed under the spotlight.
“Moving forward, the UK Government needs to reassure pensioners that they will protect them from future economic turbulence, and the Government needs to put in place a system that educates young adults around the importance of pension planning.
“Until then, workers around the British Isles find themselves working for much longer, only to retire into a pension system where they have less spending power and less freedom – not only is this a blow to a person’s quality of life, but it is a massive blow for the UK economy.”
These issues were highlighted recently by Hargreaves Lansdown, with analysis from the company showing over two million pensioners in the UK receive less than £100 per week from the state pension.
Helen Morrissey, a senior pension and retirement analyst at Hargreaves Lansdown, commented: “We often talk about state pension in terms of the maximum amount of money you can receive but data shows there are still many who receive far less than this. “The most recent figures from DWP show more than 2.1million pensioners are receiving less than £100 per week in state pension, with women overall likely to receive less than men.
“If you have other sources of income in retirement, this many not be an issue, but for many people the state pension is the backbone of their retirement planning and they could receive a nasty shock if they find they are entitled to less than they thought.
“Luckily there are ways people can boost the amount of state pension they’re likely to receive.”
State pensions can be boosted by voluntary National Insurance contributions and certain state benefits and full guidance on this can be found on the Government’s website.
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