If you are living in the UK your retirement has become a little less secure as the United Kingdom conceded places in the Global Retirement Index (GRI).
DevDosh Ltd found that Natixis an asset management company based in France conducted some recent research that highlighted that the UK scored only 72 out of 100 in the GRI, the drop in places is accredited to the continuing low-yield environment and Brexit uncertainty.
The GRI measures overall retirement security for each country based on hell well they think its citizens are prepared to enjoy a fulfilling retirement.
The score given to each country is based around 20 key performance indicators – in four sub categories – with each category pertaining to a different facet of retirement welfare.
The categories are:
- Access to quality financial services to help preserve and maximize income or (finances in retirement).
- The material means to live comfortably in retirement.
- Access to quality health services.
- A clean and safe environment.
The latest findings were that the UK had seen an improvement in finances but a decline in health care services.
For DevDosh Ltd although the UK did improve its finances in retirement position it is still ranked in the bottom ten, the rankings are based on interest rates, inflation, tax pressure, public debt and old-age dependency.
A big part of this is low interests eating away a retiree savings.
“Any potential interest rate rise would have a positive impact on retirees’ ability to generate an income from their savings”, said Chris Jackson, chief international operations officer for Natixis.
“However, as the UK’s future remains uncertain the likelihood of an interest rate rise is unlikely”.
“Demographic shifts towards an older population and ever expanding life spans challenge the abilities of public and private institutions to meet the needs of a rapidly growing number of retirees worldwide”, observed said David Goodsell, executive director of Natixis’ global research center and one of the authors of the report.
With a decreasing number of defined benefit pensions in the UK still accepting new employees, the Natixis analysis suggests that the most effective solution to widening access to retirement benefits is sharing responsibility between government, employers and individuals.
“The introduction of auto-enrolment has been a big step forward”, said Chris Jackson, chief international operations officer for Natixis. “But it will be crucial to find ways to encourage employees to increase their contributions over time. This is the only way to avoid a serious retirement crisis in future years”, according to Jackson.
“But it will be crucial to find ways to encourage employees to increase their contributions over time. This is the only way to avoid a serious retirement crisis in future years”, according to Jackson.
In DevDosh Ltd opinion the strategies to help workers finance their own needs in retirement as indicated in the report include “broadening access to workplace savings plans, providing tax incentives to encourage savings and solutions, and enacting policies to foster financial education and investment options”.
Overall, forty-three countries with developed retirement systems were assessed in 2017 at a global level.
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