UK pension 'near lowest in West'


Britain's state pension is one of the lowest among the richest nations, a report by the Organisation for Economic Co-operation and Development claims.
In a comparison of pensions in OECD countries, Britain's state pension ranks 26th out of 30 in the percentage of average post-tax salary it pays out.

A Briton on average pay of £22,000 could expect their pension to be less than 48% of their post-tax earnings.

The average pay-out from other advanced nations is 69% of average post-tax pay.

Luxembourg came top in terms of the proportion of post-tax pay its citizens could expect to receive from their state pension.

Below average

They get 102% of post-tax pay, meaning they actually receive more on retiring than when in full-time work.

Austria, Hungary, Italy, Spain and Turkey all make generous provision for those on average earnings, paying out over 75% of post-tax pay.

And, although the British state pension does not seem generous for those on average earnings, it works out better - as a proportion of past pay - for those on half of average earnings.

A person on half average earnings would get a state pension of 78.4% of their post-tax pay.

The report's findings apply only to state pensions and do not cover private pensions.

The report also said Britain's state pension system came near the top of the table for complexity.

However, on the plus side, the OECD report said it was cheap and helped redistribute wealth.

Its report, Pensions at a Glance, is the first in a series that will be published every two years.

Poverty risk

Monica Queisser, one of the report's authors, told the BBC there was a greater emphasis on private pension provision in the UK than in many other countries.

"In Britain it's always been the idea that there should just be a basic pension and that people should do quite a bit on their own, either through their employers or personally for their retirement income," she said.

However, she warned: "There's a risk of pensioner poverty in those countries where public provisions are very low."
Nice to know we are one of europes poorest pensioner groups