UK moves up one place in global retirement ranking
The UK has moved up one place in this year's Natixis Global Retirement Index (GRI) - seeing improvements in health and wellbeing dragged down by performance of retirement prospects in general.
The results of the sixth annual study, conducted by Natixis Investment Managers and CoreData Research, show the UK ranked 17th overall in 2018, up one place from last year, with a score of 73% driven up by improvements in wellbeing, quality of life and health.
However, despite the positive developments, the nation was dragged down by its performance in the study's finances in retirement sub-index - which measures how sound a country's financial system is, as well as how conducive it is to the preservation of savings and the maximisation of income for retirees - where it ranked 32.
The GRI assessed 43 countries on factors that drive retirement security including material wellbeing, quality of life, health and finances in retirement, and used around 18 indicators such as life expectancy, income per capita, old age dependency, inflation and real interest rates to calculate a mean score in each category and combined it to find an overall ranking of all the nations studied.
The finances at retirement section was based on seven factors - old age dependency, bank non-performing loans, inflation, interest rates, tax pressure, government indebtedness and governance.
The UK's scores for old age dependency (35%), government indebtedness (31%) and the favourability of interest rates (1%) were cited as "particularly low".
Overall, the UK's retirement prospects are lagging behind its developed market counterparts, as the impact of low interest rates and high levels of government indebtedness have put a strain on people's savings.
Unsurprisingly, Nordic countries continued to set the example, with performance driven by better income equality, a generous social system, and generally good economic performance.
Of the countries in the top 25, 15 were in Western Europe. Switzerland came first, due to improvements in health, quality of life and finances, bumping Norway into third position.
Natixis Investment Managers Head of institutional sales Lucas Crasborn, said: "Of the top 25 countries in the index, over two thirds saw an improvement, or remained consistent when compared to last year, but this shouldn't lead to a sense of complacency.
"The index reveals a number of themes that will continue to impact retirement in the years ahead with rising elderly populations globally; higher life expectancies; rising government debt; inflation; and low interest rates as the new normal."
Crasborn continued: "The changing demographic is increasing the burden on governments and the shifting market backdrop mean investors need to need to think about how they can diversify their investments to help mitigate the potential impact these changes could have."
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