UK pensions system continues to fall in global rankings

The UK remains outside the top 10 in the 18th edition of the Marsh CFA Institute Global Pension Index.

The Global Pension Index benchmarks 55 retirement systems worldwide, covering 66% of the global population. The index assesses each system across more than 50 indicators and three core pillars: adequacy, sustainability and integrity.

The UK’s pension system has been ranked as the 14th best system in the world with a total score of 71.6, dropping two places since 2025. The last time the UK featured within the top 10 was in 2023.

This year the UK has maintained its ‘B’ grade by achieving a B+ in adequacy and integrity and a C+ in sustainability. This score suggests that the grade’s average has been impacted the most by the sustainability sub-indice which considers cultural and economic elements such as pension coverage, total assets, demography, public expenditure, government debt and economic growth. 

Meanwhile, the Netherlands, Denmark and Iceland have retained their spots as the top three once again, achieving ‘A’ grades overall and across key markers. The Index recognises the Netherlands in particular as one of the strongest retirement income systems, combining a near-universal state pension with broad occupational pensions and voluntary private saving. Recent reforms to transition from defined benefit to defined contribution pensions have sought to preserve the strengths of its system.

In addition to evaluating each retirement income system, the research also explores the impact of ageing populations on pension systems and identifies a range of reforms that can be implemented to help improve long-term effectiveness including encouraging higher levels of private saving, increasing coverage of employees and the self-employed in the private pension system, improving governance and increasing the state pension age and/or retirement age.

Stuart Price, Partner and Actuary at Quantum Advisory, said: 

“It’s disappointing to see the UK fall again in the Global Pension Index. The publication of these results follows hot on the heels of the Natixis Global Retirement Index where the UK was ranked in a similar position – 15th in their findings.

“Our overall grade indicates that our pension system in the UK has a sound structure with many good features but has some areas for improvement and it is clear from the results that sustainability of our system is an area that needs to be looked at.

 “There is a common thread impacting the UK’s rankings in both indexes: our population and how it is changing. Demography is an element of the sustainability sub-indice in the Global Pension Index which has brought down the average grade of the UK’s pension system and the health score also declined in the Global Retirement Index.

 “As people live longer and spend more of their life in retirement, and not necessarily in the best of health as the gap between healthy life expectancy and life expectancy widens, we need to rethink and reform aspects of our pension system for it to remain sustainable and resilient for years to come.

 “Private pension saving, whether through more traditional models like defined benefit and defined contribution schemes or newer forms of provision such as collective defined contribution schemes, is crucial. Reforms to workplace pensions are a key focus of the Pension Schemes Act and we await the Pensions Commission’s final report in February 2027 for further policy recommendations to support a more sustainable pensions system.

 “Any improvements must benefit everyone, including lower earners, younger employees and the self-employed, and support an ageing population.”

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