UK has lowest state pension of any developed country - OECD
Published on 06 December 2017 10:00 AM
British workers currently look forward to the lowest state pension of any developed country, according to a new report from a leading economic think tank.
The Organisation for Economic Cooperation and Development (OECD) has calculated that upon retiring the average British worker will receive a state pension and related benefits worth 29% of what they had previously been earning. This is the lowest rate for any OECD country, where the average is 63%, and countries such as Italy and the Netherlands workers enjoy rates as high as 80%.
The OECD report highlights the high levels of poverty of older people in the UK. Among those aged aged 75 and over, 18.5% have income levels below the poverty line, most of whom are women. The OECD sees the UK's low level of state pension as the main cause of this poverty.
Responding to the OECD pensions report, Caroline Abrahams, Charity Director at Age UK, said:
'Today's report from the OECD highlights some very real concerns about the retirement prospects for so many in the UK and should serve as a wake-up call to the government to introduce policies to protect future pensioners.
'With one in six pensioners (around 1.9 million) currently living in poverty in this country – let alone the many thousands more who are struggling on a low income just above this threshold – the Government clearly needs to do far more. Unless action is taken quickly, poverty among the older generation will continue to escalate, undermining all of the progress that has been made in recent years following the introduction of measures such as the pension credit and triple lock.
'There are clearly huge variations in the wealth and health of the UK's older population and life can be very unfair on those with low lifetime earnings. We remain very concerned that the UK pensions system is still not equipped to take care of our ageing population.
'Given the current situation, the State Pension undoubtedly remains a vital tool in the fight against pensioner poverty, giving millions of older people a small element of financial security in an increasingly uncertain world. But the Government must look at how auto enrolment into workplace pensions can work with the State Pension to deliver a decent standard of living in retirement for everyone.'