Pensions_ UK ‘Least Generous in EU’

The British state pension system is the least generous in Europe, according to Aon Consulting. British pensioners receive a state pension equivalent to just 17 per cent of average employee earnings – well below the EU average of 57 per cent.

But Britons who rely on the state pension and claim a means- tested benefit, such as the Pension Credit, say, enjoy an income “approaching” the EU average, Aon said.

In response, the Government said that it had reforms in train – including raising the state pension age from 65 to 68, and restoring the link between the state pension and average earnings. And the Pensions Bill will see the introduction of Personal Accounts, where every worker who is not a member of a more lucrative workplace scheme will automatically pay part of their salary into a pension. What’s more, Britain has a stronger private and workplace pension system than most other EU countries.

In fact, Aon said the early retirement age in some other EU countries, such as France and Italy, meant they would find it harder to afford generous state pensions. Donald Duval of Aon said such countries “face major demographic and social security issues which, if not addressed, will create unsustainable pension systems”.

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