OECD: British workers will have amongst the worst pensions in the world

This was the headline in The Guardian,  The Express, and the BBC News website. 

In essence, the OECD report finds that UK workers face living on just 38 per cent of their former salary. Only pensioners in Chile and Mexico survive on less in retirement. 31 of the 34 OECD members have more generous public pensions than the UK.

Additionally, this piece on the Public Finance website spells out how the OECD regard the British model as based on “some kind of Panglossian fantasy” because the success of linking pension age with life expectancy and of the ‘triple lock policy’ depends on optimistic projections of full careers, voluntary contributions, good health and high wage growth and inflation. The position is made worse by the significant increase in the number of self-employed people in the UK as many of them are in low-paid and precarious work, with few paying into a pension.

It’s worth pointing out that the OECD figures are based on state pensions only. But for those who only have a state pension – or those with only very modest additional pension income – it isn’t hard to see why many will want to keep working for longer if they possibly can.