UK moves up to 17th in global retirement index

The UK moved up one place in the 2018 annual Natixis Global Retirement Index (GRI) to 17th, following improvements in the material wellbeing, quality of life and health sub-indexes.

In those sub-indexes, the UK ranked 16th, 12th and 16th respectively, achieving an overall score of 73 per cent.

Despite the improvements, retirement prospects in the UK are behind those of some developed market counterparts as the financial landscape has impacted savers.

Naxtis Investment Managers head of institutional sales, Lucas Crasborn said: “The financial environment is still having a pronounced effect on the UK, with low interest rates and high levels of government indebtedness putting a strain on people’s retirement.”

The UK’s ranking in the GRI was negatively affected by its performance on the fourth criteria assessed in the GRI, finances in retirement, which evaluates how sound a country’s financial system is, how conductive it is to the preservation of savings and the maximisation of income for retirees.

In the finances in retirement sub-index, the UK ranked in 32nd, the second lowest amongst the top 20 countries in the GRI and behind some emerging market economies.

The low ranking in finances in retirement was due to poor scores for old age dependency (35 per cent), government indebtedness (31 per cent) and the favourability of interest rates (1 per cent).

Crasborn added: “The UK scored particularly low on interest rates, which impacts savers and retiree incomes, particularly those holding liquid, cash like instruments such as bank deposits, certificates of deposits and money market deposit accounts. Interest rates are unlikely to return to the levels seen in the early 1990s and 2000s and savers need to think about how to secure their long-term financial futures."

However, there were some positives, including in bank nonperforming loans, where it ranked 7th overall and meeting inflation targets (100 per cent).

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