UK drops to 17th on Natixis' Global Retirement Index

The UK’s worldwide outlook for retirement ranking has declined for the third successive year, dropping one place to 17th on Natixis’ Global Retirement Index (GRI).

The index had the UK's overall score remaining unchanged at 72 per cent, although its ranking decline was attributed to lower scores in finances in retirement and material wellbeing, which fell to 56 per cent and 68 per cent respectively.

Natixis said the drop in material wellbeing was due to a lower score in the income equality indicator, while the score for finances was impacted by lower scores in the bank nonperforming loans, government indebtedness and governance indicators.

Overall, the UK ranked 19th for material wellbeing and 29th for finances in retirement.

However, it has continued to improve its quality of life sub-index score, moving into seventh position compared to ninth last year, and 12th in 2018.

The UK also had a number of top 10 indicators, including water and sanitation, biodiversity, environmental factors and air quality.

Natixis Investment Managers head of Northern Europe, Andrew Benton, commented: “Climate and the environment may not be top of mind for many considering retirement security, but they can present significant obstacles to the health and financial wellbeing of retirees.

“First and foremost are the affects that these issues have on health and wellbeing of the elderly. Second are the potential financial costs that climate-related disasters present to retirees.”

Iceland, Switzerland and Norway held the overall top spots on the GRI, with respective scores of 82 per cent, 82 per cent and 80 per cent.

At a regional level, North America had the highest overall GRI score for the fifth year in a row, with 73 per cent, followed by Western Europe, with an overall score of 70 per cent.

The finances in retirement sub-index is one area where countries in Western Europe did not perform strongly compared to the other sub-indices, as its demographic profile often means they score badly on the old-age dependency indicator, according to the report.

Overall scores for the 44 nations listed on the index are determined by creating individual scores for health, finances in retirement, material wellbeing and quality of life.

Benton added: “2020 has seen every country around the world facing the extraordinary and unforeseeable challenges presented by the pandemic. It is clear from this year’s Index how far-reaching the consequences, impacting not just health and quality of life, but with the extreme monetary policy implemented in an attempt to support economies, having a material impact on finances in retirement as well.”

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