UK pension the lowest of advanced nations, says OECD

From BBC - December 5, 2017

The UK's State Pension is the least generous of all the most advanced economies in the world, according to a new report.

A study by the Organisation of Economic Co-operation and Development (OECD) suggests full-time workers in the UK do relatively poorly.

The report found that the average pensioner can expect to receive just 29% of what they earned at work.

Only South Africa - which is not a member of the OECD - is less generous.

However, once "voluntary" pensions - such as auto enrolment or workplace pensions - are taken into account, the UK model fares better in comparison.

Even so, the pension systems in Japan, Germany, France, Italy, the United States, Canada, the Netherlands and Ireland all pay out a higher proportion of working income.

When voluntary pensions are included, the average UK pensioner receives 62% of his or her working income. This is still lower than the OECD average of 69%.

'Cliff edge'

The TUC said the government needed to improve the way the pension system works in the UK.

"The OECD has confirmed what we have long suspected - the UK is bottom of the league for pension provision," said Frances O'Grady, the TUC's general secretary.

"Working people in Britain face the biggest retirement cliff edge of any developed nation."

Since 2010 the state pension has been protected by the so-called triple lock, meaning that pension pay-outs have risen by the highest of earnings, inflation or 2.5%.

However the 2.5% element of the triple lock is due to end in 2020.



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