The quantity you want for a cushty retirement has SOARED in a yr

British pensioners are worse off than their peers in ­Germany, ­Australia and ­Ireland as they are suffering a deterioration of their finances, a report lays bare today.

The UK ranks just 14th for ­retirement conditions among 44 developed countries around the world, in a comprehensive annual Global Retirement Index.

That it did not achieve a higher position is due to the rising financial pressures Britons face, making it increasingly difficult to save for a comfortable retirement.

Experts warn of a looming pensions crisis in the UK, with greater numbers facing ­poverty in retirement due to insufficient personal savings and government support.

The study, constructed by French fund group Natixis Investment ­Managers and seen by Money Mail, compared retirement lifestyles around the world by considering four factors: health, material wellbeing, quality of life and finances in retirement.

The UK ranked 18th for health and 11th for quality of life for the second ­consecutive year.

But worryingly, the ranking for finances in retirement fell three places this year, from 15th to 18th position.

Scoring just 66 per cent, the UK was beaten by countries including Chile (70 per cent), Singapore (72 per cent), Korea (71 per cent) and Estonia (69 per cent).

Fresh figures yesterday revealed that the UK state pension is set to rise by £460 in April for retirees who receive a full, new state pension. That will put the total yearly income at £11,962.

Annual state pension rises are determined by the triple lock, which guarantees retirement incomes increase by the highest of inflation, wage growth or 2.5 per cent.

Average wages including bonuses rose by 4 per cent between May and July year on year, and it is likely this figure will be used to set the ­triple lock as it will exceed both inflation and 2.5 per cent.

But around eight million pensioners will not receive the full £460 increase as they receive the old-style state pension or do not qualify for the full annual income.

And for many, the rises that they receive in April will not outweigh the loss of winter fuel payments this year. 

The Government has also indicated further tax rises or ­benefit cuts could be in the pipeline in its first Budget planned for October 30.

Even after April’s increase, the state ­pension will still fall almost £3,000 short of what is needed for even a minimum standard of ­living in retirement, according to retirement industry approved standards.

The UK state pension will also remain one of the least generous among developed countries. Retirees in Spain, Belgium, Cyprus and France all receive more generous incomes when compared with the cost of ­living in those countries, recent ­analysis by advisers Almond Financial shows.

Maintaining living standards throughout retirement is difficult enough. But building up savings for retirement is also an ­increasing struggle in the UK, due to the pressures of inflation, sluggish wage growth and rising unemployment, analysis by Natixis reveals.

It warns that pensioners are increasingly having to rely on their own retirement savings to support themselves. For most, this means putting away money in a workplace or private pension as the state pension will be ­insufficient to support them in older age. 

However, the majority of ­savers in the UK are not putting enough away, which Natixis projects will lead to a terrifying collective retirement savings shortfall of $33 trillion (£25 trillion) by 2050. This will mark a gargantuan rise in the savings gap, which totalled $8 trillion (£6 trillion) in 2015, it warns.

Andrew Benton, head of ­Northern Europe, the Middle East and Africa at Natixis, says: ‘The past few years have seen some big shifts that impact our finances and plans for the future.

‘Whilst retirement security has improved in the UK, individuals are increasingly taking their retirement security into their own hands, given the changing market backdrop. 

‘In light of this, financial ­services providers need to be more proactive in helping ­people to save more – up to and through retirement.’

A couple now needs as much as £59,000 a year for a ‘comfortable’ retirement, or £43,100 for a ­‘moderate’ one, the latest figures from industry body the Pensions and Lifetime Savings Association (PLSA) suggest.

These sums have leaped ­substantially from £54,500 and £34,000 in one year alone thanks to soaring inflation last year, which was identified by Natixis as one of the key obstacles faced by Britons seeking a decent ­retirement lifestyle.

Achieving this level of income is out of reach for all but the ­wealthiest retirees. In fact, just 16 per cent of Britons still in work expect to be able to achieve a comfortable lifestyle in retirement, based on the PLSA standards.

Younger workers are more optimistic, with 30 per cent of those aged 18-34 expecting a ‘comfortable’ or ‘more than comfortable’ lifestyle, a study by retirement adviser My Pension Expert revealed yesterday. Just 13 per cent of those aged 55 and over expect this outcome.

But nearly half of 18 to 25-year-olds are not yet saving into a workplace or private pension, ­figures from Government-

funded support network the Money and Pensions Service reveals. This could cost them hundreds of thousands of pounds in retirement.

Lily Megson, policy director at My Pension Expert, says: ‘That millions of UK adults will work for decades but not enjoy a comfortable retirement at the end of it highlights that there is a pension planning crisis in this country.

‘Not knowing how much is saved in pension pots, where those pots are, and how to best manage that money are all serious issues, and it is clear that both the Government and the financial services industry have to do much, much more.’

Switzerland takes the overall crown for best place to retire according to Natixis, with a total score of 82 per cent, knocking Norway off the top spot, which it held for the previous two years.

Iceland and Ireland took third and fourth place respectively, followed by the Netherlands, Luxembourg, Australia, Germany, Denmark and New Zealand.

Countries in the top ten tended to perform strongly across all four categories. However, Switzerland was the only one to rank in the top ten for all four.

Ireland ranked highest in the finances in retirement category. This was based on performance across indicators including inflation, interest rates, tax pressure, government indebtedness and governance. The runners-up were Switzerland, Australia, Singapore and South Korea.

rachel.rickard@dailymail.co.uk

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