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Pensions are a big concern for people worldwide, with many contributing to a state pension that they hope will allow them to afford their retirement years with a good standard of living. However, many of the pension systems we have today were created when life expectancy wasn’t a dramatically growing number, causing an ever-shifting retirement age impacting the majority of the workforce. With this constantly changing landscape, we reviewed what the facts are, how that impacts the workforce of today in the future, and where in the world a state pension can afford you with an average standard of living today.
The facts show that we are living longer than ever before, with life expectancy increasing over 1 year for every 5 years that go by. This is increasing the number of people who will be dependent on the workforce to contribute to the economy, shifting from 1 retiree per 8 workers today, to 1 retiree per 4 workers by 2050. This ratio also changes dramatically from country-to-country, with Japan 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, and although the number is growing, there will only be 18 people who are 65 and over for every 100 of working age by comparison.
This is having a dramatic knock-on effect on retirement ages. Denmark, one of the countries with the healthiest current pension system, is expected to increase their current retirement age of 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, and then subtract 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 to bottom with a net loss per year of over £4,100 locally, with an average standard of life.
To see all the results, please read through our infographic below.
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