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How does the UK state pension compare worldwide?

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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.

And now you can find out how the UK compares to other state pension around the world in our table below. The table shows the maximum annual state pension you can get in 14 countries compared with the UK (post 2016 reforms), including whether or not it is linked to your earnings, the average salary in each country and the age for both men and women at which payments begin. Click the image to enlarge.

How does the UK state pension compared worldwide

Comments
Guest
littleoldlady says:
27 June 2015

re: Leveret 27May 2.35pm I’ve also been fascinated having come to the discussion to find out the (prior to any recent changes) the Greek pension levels !
A couple of related points – can anyone remember if a reasoned argument was put forward before the Charities Commission or whoever decided that many small “pay-in, get a bit when in need” were not worth their time and were forcibly closed ? My husband and I used to pay into one such (about a tenner a year !) which was designed so that if one was ill, it paid that amount per week. In this case it didn’t close as such but was subsumed into a more “normal” insurance firm and we never became eligible to receive anything out of it. However, my father who was subject to regular bronchial attacks swore by the scheme (run I always said so cheaply it prbably managed with only 2 staff!) I think the change was made circa 1975-82.
Also, when was (and again, does anyone remember seeing a justification) it decided that is a firm for eg had a private pension scheme, the built-up funds should not exceed a certain amount or they would be appropriated (as tax, I believe). This had the effect of companies giving first themselves, then also their workers, “pension holidays”. Again I’m uncertain as to the date, possibly around the 1990s. In my husband’s and his colleagues case, the effect of these “holidays” meant a few years later when the firm needed to downsize its staff it was a while before it became clear that the lowered pension fund (payments now being re-instated from the workforce) made even less by generous early retirement schemes for the more senior staff was now getting too small under the NEW regulations that all pension funds must equal (don’t know how it was officially expressed) ALL the requirements for the existing pensioners (whether early-retired or full-term) firstly, and then the remaining workforce when their time to retire came, otherwise the scheme would be closed (by then, it already was, for newly-employed staff) and those who had paid in but still awaiting retirement would have to take their chances with what money was left, or the whole scheme (thank goodness there was SOME sort of fall-back, thanks I gather to the actions of Robert Maxwell relating to his business’s pension fund) would be taken over by the Pension Protection Fund, at a cost of (it worked out at about 10% off everyone’s I think pension) if no other “commercial” pension scheme would let the firm give up to it – given the number of firms closing their pension schemes at the time, this last was a hopeless possibilty. The early retirees in particular fought hard against it I understand, but eventually the scheme was indeed resued by the PPF.
I’ve described things at leangth because some readers may not have heard of these wee upsets (otherwise known as the Laws of Unintended Consequences) but my point is – does anyone remember any PUBLIC discussion/awareness of these governmental ideas, and the rationale behind them ?
There is also possibly (only possibly, please don’t panic yet people as I may have missed a nice large parachute) another pensions drought en route. Various public bodies (eg local government covering libraries) used to rely on regular payments in being certain (ie, the then known as rates) to pay for things as and when the need arose – an eg being buildings/stock insurance for libraries – lose to a fire, say, replace from existing or future monies rather than pay via insurance – the authorities concerned being large enough not to need to fork out unnecessarily for it (the still had to pay for injuries et al I assume). So far as I am aware, for many years there were no “funds” held specifically to pay the future pensions of civil servants, teachers, or local authority officers. Then – and I don’t know the dates NOR the rationale, everyone had to have an identifiable and viable pension FUND. Um. Well, I’ve been told that my provider has a big enough overall fund to pay my (currently £350 per calendar month) pension. But – doesn’t the fund have to keep being topped up by existing staff’s contributions (or a VERY good investment programme)? Local authorities are shedding staff – all the libraries near where I live are asking for volunteers to help keep them open, for example. The returns from the equities markets have been miserable recently. Just how “gold-plated” ARE public, as opposed to private, pensions ? Just a thought, all you who resent them.
Just to add to John West’s comment of 26Mar 15 at 11.52pm – I agree. My (large) house needs major attention. Without it, if I sell I would just be able to afford to buy into a single room in a local “over-60s” block, provided the weekly etc fees don’t rise too fast. From the photo, I think the person taking it was standing in the wardrobe. I’d rather die. Also, all my family are in London, miles away. There’s no affordable accommodation there except via various schemes – every one of which requires one to be already living in the correct borough. I’ve been told to rent privately for 2 years in order to get onto “the list”. I think that would be too risky – I could get through the house sale cash before getting in anywhere, and not have enough for those fees etc. Same thing with going further into the country – a few lovely retirement “villages”, but high get-in costs, monthly fees (and again, all food etc is pay-for not free!) plus the kicker that if it proves unsuitable, you have to pay a (increasingly high) percentage of what you sell for, towards their capital fund. Other schemes mean you never actually own the property, but can increase your “stake” (all I have seen so far would take the value of my house upfront) to a maximum of usually 75% (which means they take 25% of the selling price if you move out) and again there’s usually ground rent or even straight rent to pay. So “downsizing” isn’t always an option for the elderly, they’re not simply being greedy in their “too-large” homes.
It isn’t simply a matter of how much the state pension should be, nor even how tinkering with pensions generally can have adverse effects so ideas should be put out into the marketplace, as it were, for discussion and a bit of devil’s advocating, before being implemented. We should look at other countries to see what they do, or what would/could be done, to make the inhabitants feel secure, and whether that is translatable to the UK. I hadn’t known, for example, of the extent of the erosion of rent protections etc in recent decades in the private sector which has probably helped pump the desire for buying one’s council place if at all possible, which ends up leaving one less place for renting. There’s nothing so unwelcome as the feeling one might have to keep moving (downwards) to afford a home, no matter what one’s age. The level of uncertainty over this as well as many other things in our society is what makes people dissatisfied, and that is what should be addressed, holistically (sorry !) rather than via individual initiatives which at best only make things better for one group and all too often are either not sustainable or simply prevent the needs of another from being regarded. Too much is top-down thinking and with too little genuine discussion.

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Guest

Phew! That’s quite a list of questions going back over several decades. There might not be anyone around who can fill in all the details for you. I’ll have a go at some of the things I have some recollection of but I think you would need to consult some experts for the full answers.

a. You mention “pay-in, get a bit when in need” funds. You are probably referring to loan clubs, friendly societies, or credit unions. A lot of loan clubs were unofficial and entirely unregulated; some of them were actually small businesses run by one or two proprietors, entirely profit-making and with virtually no beneficent purpose whatsoever. I think many folded as a result of galloping inflation in the early seventies and eventually they were put out of business by new financial regulations. Friendly societies are regulated by the Charity Commission and the larger ones have a long and proud tradition of looking after their members. Many of the smaller ‘industrial’ ones either wound themselves up because their membership declined or were consolidated to provide continued viability. Friendly Societies still have an important role in meeting the savings needs of large numbers of people. Admission to membership by eligibility is a key feature to safeguard the funds and a regular and reliable contribution record is essential, but there are tax advantages up to certain limits. Credit Unions have been in decline but are now developing again. Again there are strict controls on participation, contributions and withdrawals but they meet a need and their terms are much better, for those who are eligible, than pay-day lenders. Friendly Societies and Credit Unions are mutual non-profit-making organisations which nevertheless are required to maintain appropriate reserves.

b. I can’t remember corporate pension funds being ‘taxed’ on excess scheme reserves. This might have been an emotive way of describing the the implications of transferring too much profit into the pension fund potentially as a tax shelter. Certainly the management of corporate pension funds for commercial financial advantage has been a feature of business life for generations and many companies did indeed take a ‘pension holiday’ during the good years, usually based on over-optimistic actuarial assessments. Unfortunately, when the bad times came and many companies went to the wall, large numbers of employees discovered that their pensions were inadequately funded or their funds were effectively vacant. For those closer to retirement this was catastrophic and the government’s response was new laws on the safeguarding of employees’ interests and funding margins, tighter regulation and compliance, and a state reserve fund [the Pension Protection Fund], Many years after the infamous ‘pension holiday’ era, a large number of corporate pension schemes still have big holes in their funds which they have to fill by a planned allocation of profits year by year. Some company takeovers take place for just one pound because of the ongoing underfunded pension scheme liabilities which the new owners have to assume.

c. Many companies still operate executive pension schemes that have benefits superior to those available in the general schemes for the rank and file. The funds for both schemes should be ring-fenced to avoid collateral damage but that is no comfort to the worker if his scheme is too depleted to meet its liabilities but the directors are feather-bedded for life. Due to the measures mentioned in b. above this is a diminishing concern. So long as the schemes comply with current legislation, the alteration of schemes is a matter for shareholder approval and the ultimate sanction of the Court. Very few companies still have final salary [defined benefit] schemes available to new staff although they are virtually universal throughout the public sector. Most companies with a pension scheme operate a money-purchase [defined contribution] scheme and increasingly all employees are included or transferred into that type of scheme.

d. Much of what happened within the corporate pension environment went on without the intervention or prompting of the government of the day. Companies were left very much to run their own schemes and they appointed trustees who might not have had much specialist knowledge about what they were doing so were in the hands of consultants and advisers [for substantial fees of course]. They also followed corporate fashion.It was classic short-termism. The trades unions, to the extent that they were involved in the first place or were aware of what was going on at all, were completely outsmarted on these matters and did not understand the implications for their members of the changes being made.

e. So far as I am aware, civil service pensions are funded from current government revenues. Local authorities, teachers, the police, fire services, universities and many other public bodies have accumulated pension funds with healthy balances and are effectively protected from default through the rateable hereditament of the employers [the Council Tax base] or the security of the government’s covenant. In comparison with today’s private sector schemes, public sector pensions are certainly gold-plated, even after recent changes which have raised the employee contribution percentages. Apart from anything else they give colossal peace of mind which has to be worth a lot. I do not know the situation regarding teachers whose school has transferred out of local authority control – I think they must be entitled to remain in the teachers’ superannuation scheme otherwise the policy would have been a non-runner. Although local authorities are at last having to cut their suits according to their cloth, with an inevitable reduction in directly employed staff, this should not adversely affect the pension entitlements of those who remain. Local authorities have to make up any shortfall in pension fund provisions and this is a significant charge against their Council Tax revenues; this is highly controversial because people with inadequate pensions themselves are having to subvent the pensions of municipal workers who might – notwithstanding their protests – already be enjoying preferential terms and conditions of service.

f. Thank you for adding your personal experiences to the points I was making in my contribution of 26 March 2015 (11:52 pm). I agree with all the points you have made in the remainder of your comments and believe the implications for our ageing population are extremely serious and receiving insufficient attention. I often wonder how many people in their sixties and seventies have really worked out how they are going to manage over the rest of their lives and have put the requisite plans and resources in place. Given the shortfall in new housing provision in all forms I feel sure that a lot of people are going to be in great difficulty. The lack of new housing has an impact on the release and cascade of other properties more suitable for older owners enabling them to reduce their running costs and undertake the necessary maintenance. As you say, there is a real need for a lot more informed discussion on the approaching problems; even people in their fifties who are attempting to make forward provision by down-sizing find that without access to mortgage finance they cannot make the arithmetic work for them. Equity release and other schemes that are funded from the transfer of people’s major asset give poor yields and leave people in a precarious position as rising costs make their initial plan unaffordable in later years.

I seem to have lost sight of the ‘how the UK state pension compares worldwide’ in all of this but we need to appreciate the bigger picture before we can address the adequacy of the state retirement pension on its own.

Guest
E macdonald says:
21 June 2016

What nonsense about public sector gold plated pension schemes. The majority of public sector workers are admin and the average salary is 16,000 your not going to get much of a pension from that

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In comparison with many other occupational pension schemes public sector schemes certainly are gold-plated. Many people in other occupations earn less than, say, local authority workers for doing similar jobs with the same or greater responsibilities and they have far less certainty of their pension out-turn. The public service pensions generally provide a guaranteed percentage annual payout based on the best of the last three years’ salary of qualifying service. The funds themselves cannot become insolvent. There are superior survivor benefits and other conditions. Most if not all are index-linked. For many workers outside the public services there was often no employer’s pension scheme to join and with low wages they could barely afford to make any independent provision.

Nearly all pensions across all sectors are related to the worker’s salary level in some way. I remain to be convinced that overall public service employees suffer lower remuneration for the same input hours and also taking account of superior conditions of service like holidays, sickness pay, and annual increment-based salary schemes. The proof of this is the attitude of the trade unions to the compulsory tendering of local authority services in the 1990’s which they regarded as an onslaught on the excellent pay and conditions which they had secured for their members over time.

Where we live in Norfolk middle-ranking administrative personnel in local councils are paid in the range £20,000 to £25,000 [depending on responsibility level] for a 37.5 hour week. They make a compulsory contribution to their pension fund but the employer tops it up at tax-payers’ expense [thus public sector pensions are subsidised by people who may be on much lower incomes]. The current brake on public sector pay rises is possibly bringing them closer into line with private sector employees but the other non-pay conditions remain attractive.

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Guest

John Ward, you would pick the wings off butterflies, simply because you “dont want to get it”.

Britain’s State pension is a joke compared to European levels, just as the graph shows.

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Michael, I don’t think you’ve ever answered the question of where the money will come from to raise the pension to what you might regard as an acceptable level. I also would like to see the pension raised, and benefits at a decent level for those who deserve them. But they come from our taxes so either we increase taxes, or take the money from other public spending. It is an honest question – how will increases be funded?

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Thank you Michael.

The table in the Intro shows some other interesting information. A good way of considering the ‘value’ of the state pension is to measure it against average earnings. Using the figures given in the table and calculating the state pension stated for each country as a percentage of average earnings produces the following ranking :

Brazil – 281%
Spain – 113%
Germany – 90%
Sweden – 68%
France – 53%
USA – 52%
Netherlands – 31%
Australia – 26%
Denmark – 25%
Ireland – 25%
UK – 24 %
Canada – 22%
Greece – 21%
Japan – 19%
South Africa – 14%

The top two positions look too good to be true. Germany, Sweden, France, USA, and Australia all have earnings-related schemes and without knowing the contribution rates it’s impossible to judge their pensions’ value for the ordinary working citizen. The taxation and benefits regimes also play their part in indicating the standard of living for pensioners in each country but we have not been able to get that information consistently. At least the UK government is raising state pensions by 2.5% even though wages are barely rising and inflation is around 1%, so the position of our pensioners relative to working people is looking a little bit better than it was, and the compounding effect means that the rate of improvement is currently accelerating.

Note that the table only showed a third of the countries in the European Union so we should be cautious about drawing conclusions that might not be realistic across the board.

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Guest

We were promised 75% of average earnings after 40 years contributions.

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I have just come across an article published in the Financial Times on 23 June 2015 about a research study comparing pension provision worldwide. The provision is graded as follows and the rankings are given :

Grade A : “A first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.” Denmark

Grade B+ : “A system that has a sound structure with many good features, but has some areas for improvement that differentiate it from a Grade A system.” Australia, Netherlands.

Grade B : [Same as B+] Finland, Switzerland, Sweden, Canada, Chile, UK, Singapore.

Grade C+ : “A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long term sustainability can be questioned.” Germany Ireland.

Grade C : [Same as C+] US, France, Poland, South Africa, Austria, Brazil.

Grade D : “A system that has desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its efficacy and sustainability are in doubt.” Italy, Mexico, China, Indonesia, Japan, South Korea, India.

As usual in these exercises we cannot derive much from this about the comparability of state pension provisions alone as the research looked at a combination of state and private pension schemes in each country, but this is an important point. The UK has a very long-established and highly funded private pension backbone that will always be the dominant feature. The report says that the amount of money invested in private pension schemes in the UK “used to, and possibly still does, outweigh that across the whole of western Europe put together”. Therefore, in the UK, the state pension can only be a supplement to whatever personal provision people have made.The consequence is that the safety net for those without independent provision is both small and, of necessity, means-tested.

I will post the link to the article in a separate box.

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The information for the U.S. Is incorrect. Makes me wonder how in correct the other information is.

Guest
Gemma says:
15 October 2015

The information apparently provided by the FT via John Ward is incorrect in relation to UK , South of Ireland and Netherlands. The UK upper earnings pension has been ‘averaged out’, I’m not sure from what date this came into effect but it bears no relation to the additional contracted in contributions that employees paid. It probably only accounts for £20 per week on top of non-contributory UK State pension. John Ward should understand that the UK State contributory pension contributions should have been invested by respective governments in a special reserve fund from 1975 and they may have been able to pay decent State pensions from that investment. However, successive governments since the 1980s seem to think they can use our State contributions for everything else, including reducing the years of contributions for a full state pension from 40 to 30 years, rather than ensuring they have enough to pay a decent contributory pension, such as a pension of 40 to 50% of average weekly earnings rather than 23%. If successive Governments had ring-fenced our contributions, we would not be near the bottom of the EU pile as usual.

Guest
Michael Thompson says:
17 April 2016

The UK’s State pension is the lowest in Europe. People who deny this have their heads very firmly in the sand.

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Basic information : The UK’s basic state pension is £155.65 a week [£8,100 a year]. People of retirement age with a lower income are entitled to a pension credit top up to raise their income to that level. The personal tax allowance is £11,000 so all income up to that level is free of tax.

Here are some consolidated comments I made about one year ago on this topic : There are 28 different state pension schemes in the European Union and the UK’s is not the worst. The UK pension will always be better than many EU pensions, and much better than a Slovenian or a Bulgarian one for example. But what everyone wants is something like the German or a Swedish pension.

Each member state has its own pension scheme and there is a wide variation in scope and benefits across the EU – that is why it has proved very difficult during this Conversation to make comparisons even within Europe let alone worldwide! The UK model is one of the oldest and it has been varied many times over the years as it has developed.

Some of them are better than the UK’s because those countries are wealthier or more productive or have higher taxes or contribution requirements. Some countries in the EU are also living way beyond their means and cannot sustain their own provisions [Italy is running a growing deficit year-on-year on its state pensions because there are not enough young working people to support the rising number of elderly people living longer and they have not addressed the need to adjust the state pension age].

So far as I can recall the idea of harmonising state pensions across the EU has never been seriously considered. The economic conditions across the member states are so inconsistent that it would take an enormous amount of time to bring about a sensible alignment; even within the Eurozone common currency area there are serious fault lines that highlight the problems. The wealthier nations would balk at underpinning the pension schemes in some of the other countries which have been economically unsustainable for some time now. Most former Eastern Bloc countries have a very high and rapidly rising ‘dependency ratio’ – that is the working age [contributing] population is declining while the retired [pension-drawing] population is growing and living longer.

A popular measure of pension value is the percentage it represents of average incomes [the ‘replacement rate’] and on this measure the UK is way down at the bottom of the table. We languish well behind countries like Hungary, Slovenia and Bulgaria for example, but that is because their average incomes are so low. We are also well behind France which is currently experiencing complete stagnation due to its huge government welfare expenditure, high taxes and declining production. Italy has a very high replacement rate but there is very little private pension provision there, taxes are high and other benefits poor. My impression is that pensioner poverty is quite acute in many parts of Europe but disguised by different societal structures.

£1.5 billion of entitlements go unclaimed in the UK each year – this is the scandal that needs to be addressed.

Guest
Amfithea Svensen says:
17 June 2016

The information for Greece is outrageously incorrect. The amount presented as maximum annual pension amount is actually the maximum monthly state pension.

Guest
E macdonald says:
21 June 2016

Very few people qualify for 155 a week it’s misleading

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Are you able to give us the numbers, E Macdonald? I was under the impression that the number of retirees with a full contribution record [and therefore eligible for the full state retirement pension] was a significant majority.

Guest
Lilibet says:
23 June 2016

Yes, unless you were in any sort of contracted out employment paying D Rate NI contributions. My forecast is £125, hubby is £115, because of the reductions. 70 quid a week less!

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The UK pension level is an utter disgrace.
I thought the idea of a pension was so that you could enjoy your retirement, (I don’t mean live it up) not sit
in the house because you cant afford to go anywhere, apart from say a walk, which some elderly people find difficult to do.
If a person has chosen to retire why should they be forced to look for non existent jobs to enable them to
manage, to suit some self important government and their agendas.
Britain is only a small country with limited resources, and in more and more areas limited space,
So come on Mr Cameron and co, remember charity begins at home.

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What percentage does the various governments allow for those who work and pay taxes / national insurance who die befor getting to the pension payment age. And what happens to this money ?

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The money paid out for state pensions each year is met from exchequer revenues for that year including national insurance contributions, direct and indirect taxes, and excise duties. The amount paid out to any individual is not related to the amounts paid in but to the number of national insurance contributions made over the qualifying period. The contributions made by people who die before receiving a pension will already have been spent so are effectively lost.

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The state pension is topped up by pension credit where appropriate. However it has always been a relatively low pension and ever since I can remember it has been clear that the only way to get a decent pension is either to join the public sector, or to contribute to a private pension scheme.

It would help if the subsidy we give to public gold plated schemes were diverted into the state pension, along with money we might spend on HS2 and Trident. Even this would only help a little. If people were told that a % of their earnings would be compulsorily deducted and put into a purchased pension scheme would they think ahead to their retirement and be happy? Or do we expect more of our taxes to be used for the state pension? If so, what would suffer?

Guest
Christine Amey says:
23 May 2016

Christine
Why is John ward comparing our pension to Bulgaria or Slovenia,
We are Great Britain or we used to be. Spain is not a very rich country,but they look after their pensioners, as does Germany and France, whom I think we are on par with.
This new pension scheme from April 2016 only applies to new pensioners. People already receiving a pension before this date do not qualify for the new rate. I know you will say their pensions are made up with pension credits etc,
Why didn’t everyone go on to the new rate,to simplify things. At the present the pension scheme is chaotic with so many people having different amounts.
Whoever thought of this at the DWP must be completely mental,it doesn’t take much thought to know this will not work.
Also has anybody at the DWP thought of increasing the amount of pension that women receive who paid the married women’s stamp. These women worked and brought up families,did not receive sick pay or unemployment money. They are the forgotten women,the government should treat them the same as they are treating women In this new scheme,when they have not worked because of looking after children or being carers to elderly relatives.
The whole scheme should be scrapped and rethought properly,with discussion with the people that matter,the people of Great Britain.

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Hello Christine. Thanks for your query. A number of comments on this Conversation have been saying that the UK pension is the worst in Europe. I just wanted to set the record straight. The UK pension is far from being the worst in Europe but it is not the best either. My lengthy post above summarises the position as I see it. German pensioners receive more than ours but Germany is a wealthier country. It also has a higher cost of living though. France used to be considerably wealthier than the UK but has declined relative to the UK; its pension and welfare provisions are still more generous however but have become economically unsustainable. No two countries have the same standard and cost of living, economic output, number of dependants, or government policy. Comparisons are meaningless really but people will keep making them.

I have avoided commenting on the new pension arrangements. Their implementation seems to have been handled quite badly. I have not studied the detail but I was under the impression that no existing pensioner was going to be any worse off. Some people approaching retirement are having to wait longer than anticipated before they qualify. I recall this being made clear when the arrangements were first put forward but it did not suit the government of the day to draw attention to it and the present government has had to deal with the criticism. With the state retirement pension rising each year by 2.5% compound recently, and with tax thresholds having been raised to take more pensioners out of tax, the UK pension is in its best position for a long time relative to the rate of inflation. But there is always room for improvement.

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Christine.
Are you a pensioner John ward? If you are ,do you exist on the state pension,or have you a private pension as well.
You say comparisons with other countries are meaningless, but with this Brexit debate hot in the news,I would say it’s very relevant.
That is a whole other discussion .
Your impression was that under the new scheme no existing pensioner will be worse off, they may not be worse off,but they do not come up to the rates that the April 2016 pensioners get. They havnt suddenly got a massive increase.
Governments through out the ages have always blamed the outgoing one for all their problems,which never seemed to be resolved properly.
The arguments go round and round,if we can see it ,what is the matter with these governments.

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Yes, Christine, I get the state retirement pension and also have an occupational pension which I paid for over forty years [there was an employer contribution too, of course].

Each state in Europe has its own pension arrangements and no two are alike. The EU has no influence whatsoever over pension provisions so the question of the quality of the UK state pension can thankfully remain outside the in-or-out debate. It is, however, extremely relevant to the question of whether the UK would be better off in or out of the EU since it is undeniable that, if our economy were to suffer, the consequences for pensions, both state and private, would be adverse. I offer no view on that and people will be making up their own minds in the light of what they read and hear, but I would say that people in retirement or approaching retirement should consider that point very, very carefully before deciding how to vote.

I cannot defend the way the transition to the new pension has been handled, but pensions are difficult things to change. They last far longer than one Parliament so changes need cross-party support. I share your annoyance with the way it has worked out but cannot explain why it was done like that. A ‘no detriment’ policy is some consolation, I feel.

Guest
Eky says:
28 June 2016

John Ward, since you seem to know a lot about pensions in EU countries, would you be kind enough to help me a bit by answering to a few questions I have?

[Hello Eky, your comment has been edited to remove personal contact details. This is to align with our community guidelines. Thanks, mods]

Guest
Kathy says:
23 May 2016

I get a state pension & a little pension credit, I have heard people say pensioners are well off , well I can just about pay my bills & buy food. I get really annoyed when I hear this I would like these people to live on what I get.

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Kathy I hope you have applied for Council tax reduction from your local council as you receive pension credit?

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Good point Duncan – and there are various other reliefs available to people in receipt of Pension Credit.

Unfortunately one in five of the people eligible for Pension Credit do not claim it, so it is always worth pointing out that it an entitlement and is easy to claim.

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We have known for as long as I can remember that the state pension is not a particularly high one – although in latter years it has improved a little. So we were advised, encouraged, that putting some money away – free of income tax – was prudent to give an additional pension for when we retire. It should therefore be no surprise when it comes to drawing the state pension that it is not particularly generous. There are other benefits that increase what is available to needy pensioners.

Compulsory savings towards a pension is the only way at present. If the state pension were to be significantly increased we have to ask where the huge amount of money would come from year in, year out. What services would we like to be cut to pay for it?

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Toni ennis says:
6 July 2016

Hope you can help as I am getting nowhere with the Portuguese system. I am 66 in November and have been working in Portugal for 25 years paying social security contributions . I have also during this time continued to pay class 3 contributions in the uk on the advice of our accountants and now receive a basic pension from there. My question is am I entitled to a pension from Portugal as well as my uk one and if so how much is it likely to be. Portuguese social security say they are so far behind even if I apply for an estimate I will reach retirement age ( next February as the age of retirement is constantly increasing) before I get this,

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I think it would difficult for anybody on this website to give you a reliable answer to your question Toni unless they are in a similar situation to yourself. If the Portuguese social security authorities cannot help, you might need to consult a Portuguese financial adviser or accountant about your contribution record and entitlements, or there might be a government website that sets out the social security provisions. There might also be an ex-pats organisation that can provide information.

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Thanks for your reply.. I think the difference is that I have continued to pay class three contributions In the U.K. Therefore guaranteeing that I will receive my uk pension. I believe most people will just pay social security in one country and I wonder if I will be penalized for paying twice. I have paid 30 years in the Uk and 25 years in Portugal. My accountant has already approached the social security office here in Portugal and it seems there is nothing more she can do until filling in the application form in December. It means it is impossible to plan ahead

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It might still be worth trying to find out what your situation is from an advisor in Portugal. In principle I do not see why you could not receive two pensions according to your contribution records but that is only my opinion and not based on knowledge of the Portuguese laws. I should be surprised if a pension in one jurisdiction cancelled out a pension in another if both were funded, but you need clarification of that. if you are denied a Portuguese state pension you might like to find out whether you can have your contributions back. You will obviously haver to plan ahead on the worst case scenario and hope for a happy surprise.

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Toni I take it you are now a Permanent Resident in Portugal having obtained a Residence Certificate ? I take it you have applied to the Centro Distrital de Seguranca Social ? you should be entitled to a Portuguese pension. There are plenty of Portuguese language websites telling you your position there as well as UK.gov giving info on it.