In the last few years, the triple lock mechanism has given the UK state pension annual increases that other countries have been far from keeping up with. In state pension rankings by Almond Financial, the UK has leapt ahead in the last few years, now ranking 13th out of 28 countries.
The ranking doesn’t just list how much each country pays its pensioners. It weighs up how much the average cost of living is in a country compared to its full state pension amount. When the cost of living is equal to the state pension, this is considered the ‘breakeven’ point, and the UK and Czechia are barely scrapping above it at 13th and 14th place respectively. The findings revealed UK state pension is around £220 higher than the average cost of living. Although these calculations assumed pensioners aren’t paying for mortgage or rent.
Luxembourg topped the list, with pensioners paid out around £5,700 compared to a £931 cost of living. Although much like the UK state pension system, the exact amount each retiree gets depends on how many years they worked and paid contributions to the welfare system.
Norway was second, with a monthly state pension of £2,100 and living costs around £1050, giving pensioners significant financial breathing room.
In third place was Spain, with nearly £720 spare from state pension payments after covering the cost of living. Followed closely by Malta which had a slightly higher state pension but also a slightly higher cost of living.
Sweden, Denmark, Belgium, France and the Netherlands make up the rest of the top 10, with the breakeven point getting closer and closer. Poland and Ireland also make an appearance before the UK on the list, all with around £200-£300 spare for retirees each month.
On the other side of the list, Armenia came in last with a monthly state pension of £118.98 but monthly living costs of £518.10, putting retirees in the red. This is the fourth consecutive year that Amernia has ranked last.
Moldova was in 27th place with a state pension of £204.42 and living costs at £462.70, however, these are the only two countries where state pension payments are less than half of the monthly cost of living.
Commenting on the results of the research, Principal Financial Adviser at Almond Financial Sam Robinson, said: “The data is an interesting insight into just how well people can live when they retire right across Europe.
“For those approaching state pension age in Spain, retirement is a particularly enticing prospect with a healthy pension, low cost of living and not to mention the fantastic weather.
“This year’s increase to the UK state pension has offered a boost to the impact on 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.”