Despite falling again in the overall rankings, the UK has retained a ‘B’ grade and its total score has actually risen from 71.6 in 2024 to 72.2 in 2025.
The Global Pension Index compares 52 retirement systems, representing 65% of the world’s population, and uses more than 50 indicators focusing on three core principles: adequacy, sustainability and integrity. As well as annually benchmarking and evaluating each retirement income system, the research also offers insights into how reforms can strengthen the core three principles for each system.
The Global Pension Index reveals the UK retained its ‘B’ grade by achieving B+ grades in adequacy and integrity and a C+ in sustainability. Similarly to last year, the index reports that the value for the UK’s system could potentially be increased by restoring the requirement to take part of the retirement benefit as an income stream, further increasing the coverage of employees and self-employed individuals in private pension schemes, increasing the scope and contribution levels required under auto-enrolment and reducing the level of household debt.
Stuart Price, Partner and Actuary at Quantum Advisory, said: “As people live longer, it is critically important that retirement income provision and robust pension systems are in place. This year’s Global Pension Index results paints a mixed picture. The UK’s pension system remains outside of the top 10 and has even dropped another place in the rankings. However, its total score has risen and its ‘B’ grade hasn’t been downgraded. Indeed, the grade indicates that the UK’s system has a sound structure and many good features, performing particularly well in the principles of adequacy and integrity, but still has areas for improvement.
“While we can look to those systems ranked higher than the UK for examples of good practice and reform, it’s crucial to remember that no pension model fits all and that there are different economic, political and social factors in play from country to country. Any improvements to our pension system in the UK must benefit lower earners. Research from the government earlier this year suggests that nearly 15 million people are under-saving for retirement with lower earners, self-employed individuals and some ethnic minorities particularly at risk.
“Reforms to auto-enrolment could be part of the solution and it should be made available to more of the population. Measures that could be taken to achieve this include extending the policy to younger workers under 22 years old and the self-employed plus removing the £10,000 earnings threshold. Also, the lower earnings limit (£6,240) for contributions could be removed to enable more contributions to be made. A step further could be to increase the amount for minimum contributions (3% employer, 5% employee) to give pension savings another big boost.
“The government is reviving the Pensions Commission, the body responsible for implementing auto-enrolment, to address adequacy issues. The recommendations from the Commission aren’t due until 2027 so we are unlikely to see the impact of these on the UK’s ranking in the short-term but it will be interesting to see what announcements will be made in the upcoming Autumn Budget which would have a more immediate effect.”
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