the UK’s pension system will need more reforms to safeguard against pressures from its ageing population, a leading human resources consultancy has warned.
In its annual global comparison of national pension schemes, Mercer said the UK deserved to retain its rating as sixth strongest out of 16 nations, praising increases in projected pensions, improved population coverage and increased savings rates.
But Mercer warned against complacency. David Knox, senior partner, said: “Given the current economic situation, the risk of governments not being able to financially support their ageing population is becoming more of a reality.
“Significant pension reform needs to be made now. The best systems adopt a multi-pillar approach to spread these long-term risks between governments, employers and individuals.
“Each country has to consider its own social, economic, political, cultural and historical circumstances, but despite the differences in the history and development of each country’s system there are some common challenges around the world.”
The UK scored highly for the integrity of its system, but was marked down on sustainability and adequacy.
Glynn Bradley, an actuary at Mercer, said: “The UK is making real progress in developing a solid, sustainable pensions system, but more needs to be done if we want to consider our system best in class.”
He called for a raising of minimum pensions for workers on low incomes, an increase in the number of employees in occupational schemes and a rise in household savings.