Pensions are a concern for people worldwide. Many people contribute to a state pension that they hope will allow them to afford their retirement years with a good standard of living. However, many of today’s pension systems were created when life expectancy wasn’t a dramatically growing number. This is causing an ever-shifting retirement age that impacts the majority of the workforce. With this constantly changing landscape, we reviewed the facts. We considered how they will impact today’s workforce in the future, and where in the world a state pension can buy you an average standard of living today.
The facts show that we are living longer than ever before. Life expectancy increases by over one year for every five years that pass. This represents an increasing number of people who will contribute to the economy, shifting from one retiree per eight workers today, to one retiree per four workers by 2050. This ratio also changes dramatically from country to country. Japan is expected to have 78 people over 65 years old for every 100 people of working age. South Africa, on the other hand, is at the opposite end of the scale. Although the number is growing, there will only be 18 people who are over 65 for every 100 of working age.
This has a knock-on effect on retirement ages. Denmark, one of the countries with the healthiest pension systems, is expected to increase its retirement age from 65 to 74 in the future. With such a dramatic shift for a country leading the race financially per retiree, how will the rest of the world keep up?
The state of the globe’s current state pension system doesn’t look as healthy. As part of our research, we wanted to discover how much a state pension offers per year in each country. We then subtracted the average cost of living per person in those countries. Hong Kong proved to be the worst country in the world to rely on a state pension, with the UK coming in second last, with a net loss per year of over £4,100 locally, for an average standard of life.
See all the results in the infographic below.
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