The country with the most generous pension in the world has been named: three times more than in the UK

The UK State Pension provides a meager income that barely covers basic living expenses after retirement, the Daily Mail reports. Even those earning the full £11,500 a year face a shortfall of almost £3,000 to meet the ‘minimum’ standard of living under pension industry guidelines.

But are British pensioners really worse off than their counterparts in Europe and around the world? And how generous are public pension programs in other countries?

With the help of pensions company Aon Money, the Daily Mail looked at state pensions offered to pensioners in other major European countries, Australia and the US to find out who is getting the best deals.

GREAT BRITAIN

If a Brit has 35 years of National Insurance coverage, they will be entitled to a new full State Pension, which has just risen to the equivalent of £958 a month.

Although this is not the most generous program, its annual growth rate is higher than in many other countries, the Daily Mail states. This is because the UK has a triple mechanism which ensures that the state pension increases by the rate of inflation, average wage growth or 2.5% per year – whichever is higher.

In other countries, the state pension is typically protected at best by a double cap on inflation or wage increases.

For people on low incomes there is also Pension Credit, which is a needs-based benefit that increases a pensioner’s weekly income to a minimum of £218.15 for singles and £332.95 for couples.

Colin Haynes, European pensions partner at Aon, says the UK pension system is particularly different from other pension systems around the world in that it looks after those on low earnings or who are not working. These people may receive National Insurance contributions, which help them qualify for the State Pension. Typically, someone earning half the average income before retirement would receive 75% of that in a state pension thanks to defined benefits, he says.

This is a more generous amount than Australia, France, Germany and the US, according to Aon’s calculations. “That’s because we have a fixed pension,” explains Haynes. – you receive the same amount regardless of your earnings. In many other countries the state pension is linked to your salary. The lower your salary, the smaller pension you receive.”

The flat rate approach is more beneficial for people with low incomes. And, for the same reason, higher earners in the UK receive less from the state pension than their overseas counterparts who participate in schemes based on their earnings.

UK pensioners have access to free healthcare through the National Health Service and free prescriptions. In England, if you have less than £23,250 in savings, your local council may pay some or all of your long-term care costs. In Wales the threshold is £50,000. Anyone over 66 should also automatically receive up to £300 from the government to help pay their heating bills. This is called payment for winter fuel.

AUSTRALIA

Australians receive their state pension at the age of 67, which is broadly in line with pensioners in the UK, where the state pension age is set to rise from 66 to 68 in the coming years, the Daily Mail notes. They receive a monthly income equivalent to £1,100, which is increased annually either by inflation or by average earnings.

That’s about £152 a month more than the UK state pension, but the amount Australian pensioners receive depends on how well off they are, with the poorest getting the most.

This contrasts with the UK, where everyone, from the poorest to the richest, receives the same state pension provided they pay the required National Insurance contributions.

You might think that a means test on government pensions would discourage Australians from building their own savings, but there are policies in place to ensure that is not the case. Australia has a mandatory occupational pension scheme, which means that if you work, you must contribute. In the UK, workers are automatically enrolled in company pensions, but can opt out.

Australian pensioners also receive a concession card, which provides benefits such as cheaper healthcare, medicines and other public discounts.

DENMARK

The state pension age in Denmark is rising from 67 to 68 in 2030 and to 69 in 2035. This will make Danes one of the oldest people in developed countries to reach state pension age. By comparison, there are currently no plans to raise the retirement age above 68 in the UK (although this is subject to change and is likely to rise over time). The Danish state pension consists of two elements – a basic amount and a pension supplement.

The basic amount is a set amount that everyone receives and it is no different whether you are single or have a partner. The pension supplement is paid depending on your needs.

The basic amount is equivalent to approximately £796, but with the full pension supplement this increases to approximately £1,661 per month per person.

Danes need to contribute for 40 years to qualify for a full state pension, and payments increase each year according to average earnings. Workers are also required to contribute at least 12% of their earnings to the pension system to form their own pension fund.

FRANCE

Currently, French workers can receive a state pension from age 62 if they have made the required contributions. If they haven’t done so, they may have to wait longer. But at age 67, everyone is entitled to a full state pension, regardless of their contributions.

Despite days of nationwide protests last year, French President Emmanuel Macron signed a pension reform law that will raise the state’s retirement age from 62 to 64. This law is being introduced gradually, for three months a year, from September 2023 to September 2030. The number of years workers will have to contribute to receive a full state pension will also increase from 42 to 43 in 2027.

However, even after it is raised, France’s state pension age will still be one of the lowest in the world and, under current plans, the French will still be able to retire four years earlier than their British counterparts. The state pension in France is also more generous – about 1,570 pounds sterling (185 thousand rubles) per month, and every year it grows along with inflation.

GERMANY

The right to receive a state pension in Germany can be obtained if you have worked there for at least five years. This is in contrast to the UK, where you had to contribute for at least ten years to get anything, the Daily Mail highlights.

The maximum amount German pensioners receive is around £2,140 per month, but this amount is determined by how much the person has earned during their working life. The monthly amount increases in accordance with average earnings each year.

The state pension age is 66, which will increase to 67 in 2029. German retirees must also pay into the public health insurance system, which covers long-term health care costs, unless they decide to opt out and pay for private health insurance instead.

Public insurance is designed to cover basic needs, not the full cost of medical care. Therefore, those who use these services must still pay some of the costs themselves.

Germany, like many other European countries, offers pensioners passes that provide them with free or subsidized public transport.

NETHERLANDS

You are only entitled to a full state pension in the Netherlands if you have lived or worked there for at least 50 years.

The maximum amount pensioners receive is about 1,230 pounds sterling (144 thousand rubles) per month, and they can claim it from the age of 67. The state pension age has been rising gradually since 2015, when it was 65. Although state pension payments are apparently not the most generous, they are among the best compared to average earnings in the Netherlands.

For example, according to Aon’s calculations, a person who earned the average Dutch salary before retirement will still receive the equivalent of 93% of that income when they retire on their state pension.

This figure is exceeded only in Denmark, where the so-called “replacement rate” of income is 118%.

This means that pensioners receiving the full state pension receive a higher income than workers on average wages. The replacement rate is 86% in Spain and 75% in the UK. In the US this figure is only 61%, and in Germany – 59%.

Benefits in the Netherlands are reviewed every six months and increase in line with increases in the minimum wage of workers.

SPAIN

Pensioners in Spain receive generous state pension payments of up to £3,060 each month, which they can start claiming from age 65. Payments increase with inflation and are based on how much recipients earned during their working career. It takes 38 years to receive full contributions. Healthcare in Spain is publicly funded, similar to the UK’s National Health Service.

USA

The US program is one of the most generous, with US retirees receiving the equivalent of approximately £2,880 per month if they have contributed for 35 years. This program is based on how much workers earned before retirement.

American workers must also contribute at least 12.5% ​​of their earnings to a pension system made up of contributions from both the employee and the employer, writes the Daily Mail.

American retirees age 65 and older can receive certain free health care services through the Medicare health insurance program. Retirees had to pay enough in taxes while they worked to gain access to Medicare, which covers some health care costs, including hospital stays, doctor visits and some prescription drugs.

Pensioners can spend part of their £2,880 monthly pension payment on extra insurance to pay for medical costs not covered by Medicare. “Many US companies used to provide extra health care for retirees, but now many employers have cut it,” adds Colin Haynes.