UK vs Europe – how does your pension income compare

State Pension: Expert outlines criteria to qualify

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A study by pension advisors Almond Financial, said UK pensioners have just £114 extra to spend after covering the cost of their essentials. Many people will look at other nations to compare their income with, and the study has seized upon this idea.

The UK finished 15th in the Pension Breakeven Index, only 16.61 percent above the pension income breakeven point.

The study found the UK state pension pays £114.28 more than the average cost of living for a pensioner.

With the added pressure of the cost of living crisis, the Index states pensioners will be left with “very little wiggle room” when it comes to their finances.

However, in comparison, some residents of other countries across Europe will have more disposable income.

Spain has topped the European Pension Breakeven Index, as its pension system pays out a maximum of €2,617.53 per month.

This is the equivalent to £1,403.89 more than the UK state pension, the organisation stated.

It means pensioners can expect a comfortable retirement, as Spain is considered to have a relatively low cost of living.

Belgium, Luxembourg, Bosnia and Herzegovina, and Cyprus rounded out the list of the top five.

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In comparison, some countries fall behind the breakeven point according to this research.

These are: Sweden, Moldova, Finland and Belarus, where many pensioners might struggle with the cost of living.

Sam Robinson, principal financial adviser at Almond Financial, said: “The UK has a system that is just above the breakeven point which means at present, there isn’t much room to manoeuvre for those battling the cost of living crisis.

“And while it is positive that the UK finds itself among the top half of countries, for how much longer is the question.”

As a result, the expert urged people to look towards other forms of income aside from the state pension to maintain their retirement.

This may involve workplace or private arrangements, savings, ISAs or investment.

However, people should always be aware capital can be at risk with investment – and individuals could get less back than they originally put in.

In addition, some may wish to seek pension advice either through an independent financial adviser, or guidance through the PensionWise service.

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In the past, some have argued the UK “lags behind” compared to other nations, however the DWP has previously said pension systems across the world are too different to be compared.

The DWP states the UK state pension “continues to provide a strong foundation for retirement planning and financial security in older age”.

A spokesperson previously told “Alongside this, Automatic Enrolment has succeeded in transforming private pension saving.

“A record number of Brits are now saving for retirement – more than 10 million workers have been enrolled into a workplace pension since its introduction, with an additional £28billion saved in 2020 compared to 2012.”

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