What is the average pension by country?

This content was reviewed and approved by Andy Gray.

The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser.

In 2025, the full, flat-rate UK State Pension increased to £230.25 a week in line with the government’s triple lock – giving pensioners an extra £470 per year in their pocket.

But how does the UK State Pension compare with other countries? Discover the average pension by country and find out how the UK stacks up against the rest of Europe and other economically advanced countries.

What does the average pension by country cover?

If you’re approaching State Pension age and have made the maximum National Insurance contributions, you’re probably looking forward to receiving the full, flat-rate State Pension.

Most of us in the UK will benefit from the State Pension, built up through contributions from ourselves, our employers and the government during our working lives. Similarly, many people boost their retirement income through a personal pension scheme, an occupational pension scheme, or both.

These days, rising living costs are stretching pensions in the UK and other European countries like never before. However, with the help of professional retirement and pension advice, people are finding smart ways to make their money go further.

So, how does the UK State Pension compare with similar systems across Europe and beyond? Here, we examine the average pension by country to find out which is the most pension-friendly to live in.

Who has the best State Pensions in Europe?

The country with the best State Pension in Europe is Iceland, where the average pension expenditure per beneficiary is €35,959, or around £30,251. This figure is more than double the average State Pension in EU countries of €16,138 (£13,580) and also the full UK State Pension of €14,227 (£11,973 or £230.25 per week).

According to Commons Library, the UK has also fallen behind other European countries when it comes to State Pension provision. The data suggests the UK devotes a smaller percentage of its gross domestic product (GDP) to State Pensions and pensioner benefits than most other economies.

For State Pensions alone, the UK trails other advanced economies in providing lower pensions in relation to average earnings. In real terms, this works out as an overall net replacement rate of 54.4% from mandatory pensions for those with average earnings, compared to the Organisation for Economic Co-operation and Development (OECD) with a 61.4% average.

However, UK pensioners make up for the shortfall by receiving more of their retirement income from workplace pensions and personal pensions than in other developed countries where the State Pension is more prevalent.

The Top 10 Average State Pension Expenditure Per Beneficiary in Europe

Iceland leads the way in Europe in terms of average State Pension provision. Here are the top 10 ranking countries for average pension expenditure:

• Iceland: €35,959 (£30,251)
• Luxembourg: €31,835 (£26,778)
• Norway: €30,879 (£25,972)
• Denmark: €30,211 (£25,410)
• Switzerland: €27,010 (22,719
• Austria: €24,349 (£20,480)
• Netherlands: €24,092 (£20,264)
• Belgium: €22,577 (£19,000)
• Sweden: €22,436 (£18,882)
• Ireland: €21,766 (£18,318)

The OECD also states that pensions are the main source of income for older people in Europe. State Pensions and benefits make up over 70% of older adults’ total household income in most European countries, and in some cases, more than 80%.

How can I boost my retirement income?

You’re never too young to start saving for retirement. Perhaps the State Pension won’t be enough to fund the lifestyle you want in later life.

Some common ways to improve your retirement income include:

1. Join a pension scheme

Pension plans provide you with a steady income when you retire. There are many different types of pensions, including workplace pensions, private pensions and the State Pension. Also, there is no limit on the number of plans you can open, providing you with options and flexibility.

2. Make more pension contributions

You can improve your pension pot by increasing your pension contributions. This is a popular choice if you’re still working, as your employer will also be paying into your pension. However, it’s important to understand that the amount of pension contributions you make can affect your tax liability.

3. Combine your pensions

If you’ve moved jobs several times, you may belong to multiple pension schemes. If this sounds like you, it may be beneficial to consolidate your pensions into one place. However, you should always consider the pros and cons of combining your pensions and discuss your options with a financial adviser before pushing ahead.

4. Save and invest

If you’re approaching retirement, you may need other savings and investments to maximise your income. Some common savings and investment schemes include lifetime ISAs, which help you save in a tax-efficient way and can deliver long-term growth.

5. Defer your State Pension

If you’re not ready to draw your State Pension, you can choose to defer it when you reach retirement age. Doing this will increase your payments by 1% for every nine weeks that it’s deferred.

6. Keep on working

You don’t have to give up work when you reach retirement age. Many people continue to work in retirement, whether part-time, full-time or self-employed, as a means of topping up their pension pot and keeping active. However, if you decide to work past your State Pension age, it could push you into a higher tax bracket.

Need financial advice to help you plan for retirement?

With so many options and possibilities, navigating pensions can be tricky. Seeking professional retirement and pension advice will improve your understanding and offer guidance on the products that could help you reach your retirement goals. Contact us today and we’ll be happy to help.