Our latest Which? Money investigation looked into state pension systems in 15 different countries. Where do you think the UK sits in relation to its counterparts?
It’s extremely difficult to make a like-for-like comparison between nations’ pension schemes, as each country has different qualifying criteria and ways of calculating your entitlement.
However, despite this, our snapshot survey shows some marked differences.
Pension schemes are worlds apart
While the Swedes enjoy a maximum state pension of just over £25,000 a year, South Africans get a maximum of £1,044. And although Britain’s current basic state pension of around £5,500 a year leaves it near the bottom of the league table, government reforms will see this rise to almost £7,500 (in today’s money) in 2016.
It’s important to remember that you can’t look at a country’s state pension in isolation. How much tax people pay and what they get for their taxes are inextricably linked to the issue of pensions.
Another vital consideration is the average salary for each country. For example, a yearly pension of £1,044 in South Africa might not seem quite so low when you learn their average annual salary is £7,421.
Support for private pension saving is another key issue. Like Sweden and the Netherlands, the UK’s private pension coverage boosts its meagre state pension.
Pension ages on the up
State pension age is also a controversial subject in the UK. For many years it was 65 for men and 60 for women, but it’s increasing to 66 for both genders by 2020, to 67 by 2028 and will rise in line with life expectancy thereafter.
But the UK isn’t alone in increasing state pension age – of the 34 Organisation for Economic Co-operation and Development countries, 28 others intend to do the same.
*The state pension age may have changed since the date of publication for this article. For the latest advice and information on the state pension, check out the Which? State Pension calculator and advice guide.