It’s official: the British state pension at a maximum £110.15 a week is the most miserable in Europe. Compared to average income, even Hungary and Slovenia better the pension benefits 12.3m British pensioners receive, according to a new OECD report.
British workers on average earnings typically get a state pension worth 32.6% of their working wage. A complete disgrace?
State safety net frays
If you compare bald state pension stats, it doesn’t look good. Italian workers, in contrast, can expect 70% of their working salary from the Italian government when they retire. In the developed world, only Mexicans receive less proportionately from the State pension than British workers.
Drilling into the data, the average European State pension is worth 40.6% of average earnings. If you want to retire comfortably on State coffers compared to those in work, one of the best countries is Austria, at 76.6% – or the Netherlands, even better, at 90.7%. Many Europeans also retire earlier than their British counterparts.
However with cost of living costs rising across Europe, bald figures should be treated with care. There’s also a lot of disparity between private saving rates. For example, though the Italian State pension figure appears disproportionately high, few Italians have private pensions.
French live longer
What is a more realistic level of state pension income? The British state pension should be set at £178 a week if it is to be a proper ‘living State pension’, the National Pensioners Convention claim.
There are plans to introduce a flat rate UK pension of around £144 come 2016, worth just under £7,500 a year, though you will need to have worked up 35 years worth of National Insurance contributions to qualify rather than the current 30 (a move the Government has been quiet on).
Any good news? The OECD does say that absolute poverty rates of British pensioners aged more than 65 in the UK fell from 12.2% to 8.6% between 2007 and 2010.
But if you want to have the longest retirement, head for France. The average French male pensioner will live 22.6 years (27.4 for women) on average after leaving work. The average British male kicks the bucket almost five years earlier.