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A recent report that compares 37 retirement systems across the globe has given the UK pension system a C+ and ranked it 14th in the world because, although it scores high on integrity, it is low on adequacy and sustainability.
The annual report says that little improvement has been made in strengthening the adequacy of the UK retirement system, meaning that employers may have to play a bigger role in helping to close the retirement savings gap.
The report suggests that the UK could improve its position by raising the minimum pension for low-income, increasing contributions to workplace pension schemes and enabling better coverage for the self-employed.
According to the report, while savers trust the UK pension system to deliver for them, they lack enough information and understanding of what they need to do to save for a comfortable retirement, which means they are not saving enough.
One of the report’s authors commented, if workers were given education in what they will actually need in retirement, the UK’s adequacy score would improve dramatically.
He added that if employers were to take a more active role in securing their employees’ retirement, this would support engagement and productivity and would also help in attracting top talent.
The annual global pension index scores across three rankings – adequacy, sustainability and integrity – and the UK scored 60.0, 55.3 and 84.00 respectively, giving them an average of 66.43.