UK pension system slips in global rankings

The UK’s pension system has fallen in international rankings, with its sustainability score now trailing behind many peers, according to the latest Marsh CFA Institute Global Pension Index. The country placed 14th out of 55 retirement income systems, dropping from 12th in 2025. Researchers warned that recent government reforms will not fully resolve long-term challenges facing the system.

Its overall score decreased from 72.2 to 71.6, maintaining a B grade. The sustainability score, measuring resilience against demographic pressures, fell from 63.2 to 62.4, earning a C+. Adequacy, which assesses retirement income levels, dropped slightly from 75.9 to 75.6, while integrity, reflecting trust in the system, declined from 79.0 to 78.0.

Marsh attributed the decline primarily to persistent gaps in coverage and low saving levels. While the Pension Schemes Act 2026 and the establishment of a Pensions Commission are steps in the right direction, the report argued that more substantial changes are required. Auto-enrolment coverage remains inadequate, and retirement savings rates still lag behind top performers like the Netherlands, which leads the index with an 85.8 score, and Denmark.

The report emphasized that introducing guided retirement, a system to help savers manage withdrawals, could enhance security, but only if implemented with precision. It also noted that proposed adjustments to the triple lock could improve long-term sustainability. In his first industry address since the government’s triple lock announcement, pensions minister Torsten Bell spoke about why the triple lock has to change. Bell framed the changes as part of a wider push to rebuild trust in the pension system and ensure that sustainability was not dependent on raising the state pension age. Read the full report.

Marsh’s findings reveal a global trend: sustainability remains the weakest metric across pension systems, strained by ageing populations and increasing life expectancies. The report outlined seven critical reforms to strengthen systems worldwide, including expanding auto-enrolment to non-standard workers, restricting early withdrawals, and encouraging higher private savings. It also recommended stronger governance in private pension schemes and aligning retirement ages with evolving health trends.

Christine Mahoney, global leader for defined benefit and defined contribution pensions at Marsh, said: “Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements for the generations ahead.”