Want the best retirement? Settle down in Denmark, says report. If you want to escape the UK when you retire and need a good reason to settle down somewhere different, then Mercer’s Global Pension Index may give you more reason to leave – especially given that eight countries rank higher than Blighty.
In the new report, the UK’s rating as a good place to retire has dropped from 67.6 in 2014 to 65 in 2015, largely due to pension reforms that have removed the need for people to buy annuities when they finish working.
The yearly index, which looks into the retirement income options of 25 countries, takes into account no fewer than 40 categories that include tax relief, savings, regulation and communication. It saw the UK remain in the top ten, though it dropped to 14th on the adequacy sub-index, where countries are judged on their minimum pension provisions.
It’s not all doom and gloom for the UK, though; it ranked fourth on the integrity sub-index, as it is clear in establishing and regulating its rules, while providing extensive communications to retirees about their funding needs.
Top of the table for best retirement was Denmark, which may be little surprise to those who are familiar with Mercer’s report; it marks the fourth consecutive year that the Nordic country has finished first in the world for its retiree provisions. It drew particular praise for its pension system funding, where assets were 169% of gross domestic product.
Rounding out the top five were the Netherlands (80.5), Australia (79.6), Sweden (74.2) and Switzerland (74.2). At the other end of the scale, India was bottom of the index, scoring under half of Denmark’s score (40.3). It does not provide a minimum level of support to poor retirees, and does not implement a minimum age limit for when people can access their savings.
Dr David Knox, the report’s author and a senior partner at Mercer, said: “Developing and implementing the right reform to improve pension systems and provide financial security in retirement has never been more critical for both individuals and societies.
“In coming years, age-related spending around the world, primarily driven by increased pension and healthcare costs, will potentially outstrip the costs of the Global Financial Crisis, the most significant financial crisis in 100 years.”
The results in full:
1-5: Denmark (81.7), Netherlands (80.5), Australia (79.6), Sweden (74.2), Switzerland (74.2)
6-10: Finland (73), Canada (70), Chile (69.1), UK (65), Singapore (64.7)
11-15: Ireland (63.1), Germany (62), France (57.4), USA (56.3), Poland (56.2)
16-20: South Africa (53.4), Brazil (53.2), Austria (52.2), Mexico (52.1), Italy (50.9)
21-25: Indonesia (48.2), China (48), Japan (44.1), South Korea (43.8), India (40.3)