Although many retirees and those soon to be retired are going through difficult times in Britain with respect to their pensions, they are reportedly better off than their counterparts in countries like Italy, France or Germany, according to a study released on Wednesday.
The study conducted by Aon consultants found that UK ranked 6th out of 15 countries in implementation of state and company pension schemes in Europe. But, not all agree with the findings of the study conducted in 15 out of 21 EU member states.
Donald Duval, Aon Consulting's chief actuary said: “Despite a lot of the hype, the UK pension system is in reasonable shape overall, but things are going in the wrong direction.” He added: “On current policy, the UK will slip steadily down the European rankings because company pension provision is now declining, and the state pension is becoming increasingly inadequate.”
The report said that UK appeared in much better shape largely due to the comparatively liberal company pensions, and also because it has the third highest proportion of people between the ages of 55 and 64 who are still in employment.
The report has been released by Aon just a week before Lord Turner headed Pensions Commission comes out with its report on the UK pensions system. It is expected that Lord Turner would recommend increasing the age at which retired people become entitled to a full state pension up from 65 to 67, which will pave way to provide future pensions that are more generous.
Interestingly, Aon’s report ranks the UK ahead of larger economies including France and Germany. It is behind Portugal, Ireland, Holland, Sweden and Denmark. Aon Consulting came up with "European pensions barometer", which is based on four factors, including each country’s demographics, costs incurred in providing state pension, its sufficiency, and finally the percentage of assets provided in company pensions.
State pensions in France and Germany are becoming unaffordable and they have a larger retired population. Portugal, on the contrary, was in the top spot thanks to its increasing younger population.
The report showed that Belgium pension system was the least generous among the 15 countries surveyed because of low state pensions and a low percentage of immigration which accounts for less number of young workers.
Posted
on : Thu, 24 Nov 2005 08:40 GMT | Pensions News
By : Paula Jenkins
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