Retirement worldwide: do Brits have it best when it comes to pensions?

3 minutes

They say the grass is always greener on the other side - but how does the UK's approach to retirement and pension planning measure up to that of other countries?

We're taking an expert look at growing older around the world and some of the unusual takes on retirement.

  • Many Asian workers want to raise the retirement age
  • Where does the UK rank for pension income worldwide?
  • A midlife MOT could help you get to grips with pension planning

Retirement around the world

Views on retirement vary enormously from country to country. Standards of living, cultural considerations and life expectancy all play key roles in determining when you retire and what you can do in your retirement – but a society’s attitude to growing older and pension planning both play a huge part.

In the same week that the 2017 Melbourne Mercer Global Pensions Index was published, ranking the pension systems in 30 countries, we looked at some of the more idiosyncratic attitudes to retirement worldwide and asked experts what we can learn from the views of other countries.

Many in Asia want to raise the retirement rel="noopener noreferrer" age

According to a 2015 Global Aging Institute study, many workers in Asia want to increase the retirement age – something that could seem strange to many in the UK left bemused by our country’s recent State Pension age increase.

Meanwhile, experts from the Japan Gerontological Society and rel="noopener noreferrer" the Japan Geriatrics Society recently suggested senior citizens should be viewed as 75+, not 65+, arguing that they are just as capable as younger people.

‘Life expectancy in different regions does vary and this is an important factor in considering the appropriate rel="noopener noreferrer" retirement age.’ says Michele Cracknell, chief executive of the Pensions Advisory Service (@TPASnews).

The Japanese have the longest life expectancy in the world, at 83.7 years, while life expectancy in the UK is two and a half years shorter.

Michelle points out that the skills and physical requirements needed for different jobs all vary, so there is no blanket solution.

‘Everyone is an individual, so the retirement system needs to be flexible to meet differing needs,’ says Michele.

If you do have a demanding job, ensuring you have a good work-life balance could help you to work better for longer.

One size doesn't fit all

Denmark has the best retirement income structure, according to the 2017 Melbourne Mercer Global Pensions Index, which ranks the UK 15th and gives us a C+.

However, Michele emphasises that comparing retirement income structures is difficult because the landscape is never static.

‘In the UK, we have seen unprecedented levels of change over the last 25 years, so the current system is not actually the primary driver for today’s retirement income,’ she says.

‘For example, the average level of contributions into defined benefit schemes is currently inadequate to provide a reasonable income in retirement. Most people retiring today will receive a significant proportion of their retirement income from a defined contribution pension along with their state pension.’

Michele believes one area in which the UK could do better rel="noopener noreferrer" is encouraging people to seek help in planning for their retirement, by using the ‘mid-life MOT’ suggested in the Cridland Report.

This MOT would provide middle-aged workers with an assessment of their pension savings by the government and their employers, giving them plenty of time to plan ahead. Although this is just at the recommendation stage, workers could set up their own mid-life MOT to better assess their personal finances.

Early retirement in Russia and Belarus

Russia and Belarus have the lowest retirement age: 60 for men and 55 for women. This may seem attractive compared to the UK system – but in reality our retirement age is much more flexible than many of us realise.

‘The rel="noopener noreferrer" UK doesn’t have a set retirement rel="noopener noreferrer" age – you can retire at 30 if you can afford it,’ explains Karen Barrett, CEO and founder of (@unbiaseduk). ‘And that’s the key: affordability. Could you still maintain your preferred lifestyle for the rest of your life?’

Karen stresses that it’s important to keep in mind that UK life expectancy is 10 years longer than in Russia, which helps to explain why Russians can afford to retire earlier.

‘The other major factor is the size of your pension pot,’ adds Karen. ‘And the secret of a large pension pot is simple: start saving rel="noopener noreferrer" as soon as you can; save as much as you can; and get independent advice on the best pension fund for you.’

Slovakia has the mother of all pension schemes

In Slovakia, women with five or more children who hit retirement age in 2014 had their retirement age of 53 years increased by 99 months [1]. Unsurprisingly, UK experts are sceptical about whether such a system would work here.

‘Most people appreciate a simple and clear set of rules,’ says Karen. ‘Adding specific social or demographic qualifications is very complicated. For instance, would adopted children count?’

Although it’s fascinating to look and learn from other countries, each government has to consider its own social, economic and cultural issues to determine the right system for its people.

‘For example, some countries have a strong extended family culture, which will have a bearing on the income needed in retirement,’ says Karen. ‘A system that works well in one country may not work so well in another.’