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British pension ‘one of the least generous in Europe’

Britain’s pensioners are at greater risk of poverty during retirement than the majority of other European countries due to the UK having one of the least generous state pensions in the continent. 

A study from the International Longevity Centre UK looked at how much of the typical income of someone in the workforce the state pension replaces in 27 European countries. In Britain the state pension of £113.10 a week is worth only a third of the average salary of someone in work. This puts it 21st out of the 27 countries.

People who live in Greece receive almost 100% of their pre-retirement income, while the average throughout Europe is around half. Spain, Austria, Italy, Cyprus and Slovenia all have pensions worth more than 60% of working income.

Helen Creighton of ILC-UK said: "The government aspires for the UK to be the best place in the world to grow old. But this new factpack shows that whilst the UK is by no means the worst place in Europe to grow old, we’ve got a lot to do to top the European league. Government is right to aspire to be the best. But to achieve that we must look at and learn lessons from our European colleagues."

The study also found the 16% of pensioners at risk of poverty in the UK is higher than the European average of 13%.

222 replacement

But the report also found that other schemes in Britain have a positive impact on pensioners. The Winter Fuel Allowance has helped the UK have only 3% of pensioners complain about living in cold homes, compared to the European average of 12%, and 52% in sunny Portugal.

Estonia and Poland offered the least generous pension relative to average earnings, the report found. In Estonia pensioners typically received just a quarter of the income they earned during a working life.

The data was based on an OECD study in 2012 and did not take into account reforms that will set the state pension in Britain at a "flat-rate" £155 a week in 2016.

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