The UK state pension has stood at 26 per cent above the cost of living benchmark, leaving pensioners with an average monthly surplus of around £220 after covering basic living costs, according to Almond Financial’s 2026 Pension Breakeven Index.

The 2026 index looked at various pension systems across Europe to establish which country offered the most to retirees in comparison to the country’s current cost of living.

It found the UK state pension ranked thirteenth in the list of 28, behind the neighbouring countries of France and Ireland, despite recent increases.

UK retirees received £1045.63 in state pension per month, against living costs of £825.

In contrast, Luxembourg topped the list with its retirees more than five times better off than the breakeven point, with an average monthly pension of £5,719, compared to living costs of £931.

Norway and Spain were the next strongest-performing countries, with pension income sitting 241 per cent and 116 per cent above the breakeven point, respectively.

At the bottom of the index, Armenia’s pension income fell 86 per cent short of the cost of living, followed by Moldova at 56 per cent below the breakeven point.

Commenting on the findings, Almond Financial principal financial adviser, Sam Robinson, said: “The data is an interesting insight into just how well people can live when they retire right across Europe.”

“This year’s increase to the UK state pension has offered a welcome boost to pension income versus the cost of living, meaning pensions could feel slightly better off.

"Despite this, the UK state pension still rests just above the breakeven point and remains weak compared to other pension systems across Europe," he added.

Updated for 2026, the analysis assumed that most pensioners were mortgage or rent-free, before Almond Financial ranked countries in its annual Pension Breakeven Index from the most pension-friendly to the least.

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