As it currently stands, when people in the UK reach the age of 65, they are entitled to claim their state pension, which works out at £168.60 per week. Individuals can obviously top this up with workplace and private pensions.
However, how does the UK’s state pension position compare with our EU neighbours? With Brexit looming, Stuart Price, Partner and Actuary at Quantum Advisory, looks into how much other European Union members offer their citizens as part of their pension package and at what age they will receive it.
Stuart said: “Both men and women in the UK now receive their pension at 65, with this increasing to 66 next October, to 67 by 2028 and 68 by 2046 currently. While there was some controversy here regarding the gender equalisation and age increases, the Pension Adequacy Report 2018 states that almost all EU member states are doing exactly the same, ‘although from different starting points, with different ambitions and different gender emphasis.’ While that might seem like we’re all on a level playing field with the same goals in mind, Latvia and Estonia both currently have a retirement age of 63 with a plan to steadily increase to 65 in 2025 and 2026 respectively. In Malta you can retire at 62, increasing to 65 in 2027, and in Austria, women can retire at 60 but this will level with men to 65 by 2033. The UK, Ireland and Finland all have the highest scheduled age after 2020, with the latter rising up to 70.
With regard to how much retirees receive for their pension, it is hard to directly compare as countries base their calculations on different systems. However, the ‘Pensions: International comparisons’ report published this May, found that the Netherlands, which has one of the world’s leading pension systems, pays £241 per week for single pensioners and £166 per person for those in a pensioner couple, and in Denmark all pensioners can expect to receive £168.58 per week – virtually the same as the UK – although theirs can be topped up with supplements.
Looking at the figures, it seems all countries know that with increasing life expectancy, among other factors, the current systems are not sustainable. Pension ages will need to continually increase to reflect this and I believe the UK is leading the way.”
Stuart Price, Partner and Actuary