The UK has fallen one place to rank 18 out of 44 nations when it comes to retirement security, based on the Natixis Funding Administration 2021 International Retirement Index, whereas Iceland maintained its rating as primary for the second consecutive yr.
As reported by our sister title, European Pensions, Switzerland and Norway ranked second and third respectively, adopted by Eire, the Netherlands, New Zealand and Australia, with the highest seven holding identical positions as final yr.
Germany and Canada, in the meantime, have swapped spots, with the previous transferring to eighth place and the latter transferring to tenth, whereas Denmark remained at ninth general.
The UK, nonetheless, has fallen one place within the rating to 18 out of the 44 nations included within the index, with its general nation rating remaining at 72 per cent.
This decrease rating was attributed to a decline in three sub-indices: high quality of life, well being and funds in retirement, with the UK rating seventh, 18th and twenty ninth for these sub-categories, respectively.
Regardless of the autumn in rating, the UK nonetheless has a number of prime ten indicators, with water and sanitation rating first as an example, while biodiversity ranked 4th and air high quality ranked tenth.
The report additionally revealed a lot of regional highlights, with Western Europe discovered to the be second highest area with an general rating of 69 per cent, though it was the very best scoring area for each well being and high quality of life.
Jap Europe and Central Asia, in the meantime, ranked third as a area at 50 per cent, with 4 of the underside 10 nations in Funds included on this area, together with Turkey, Hungary, Slovak Republic and Latvia.
Asia Pacific, nonetheless, was discovered to have the bottom general regional rating of 32 per cent, with this area receiving the final or second-to-last rating in three out of the 4 sub-indices.
Extra broadly, Natixis IM’s report emphasised that the dangers offered by inflation, rates of interest, and public debt, and the monetary challenges of employment and healthcare have been exacerbated by the Covid-19 pandemic, warning that retirees are notably weak to low charges and rising inflation.
It additionally warned that while there may be optimism round double-digit returns markets have delivered because the March 2020 Covid downturn, sentiment reveals that traders are far much less optimistic about attaining retirement security.
Particularly, the Natixis International Survey of Particular person Buyers confirmed that seven in 10 persons are assured that they are going to be financially safe in retirement, whereas 40 per cent of traders count on that “it can take a miracle” to retire securely, with 45 per cent so involved about retirement they keep away from occupied with it altogether.
It additionally famous that shifts within the pension panorama have compounded this, with eight in 10 people surveyed conscious that the shift from outlined profit to outlined contribution has put growing accountability on the person to fund their retirement.
Moreover, on account of the shift to DC, the “overwhelming majority” (80 per cent) mentioned that they might be extra inclined to work for an organization that provided matching pension contributions, whereas seven in 10 mentioned that investments that replicate private values would encourage them to save lots of extra.
Commenting on the findings, Natixis IM head of Northern Europe, Andrew Benton, mentioned: “We’re at an attention-grabbing inflection level the place the accountability for a safe retirement is shifting away from employers to people.
“Entry to an acceptable retirement financial savings automobile mixed with incentives to save lots of are crucial for people, who’ve ever-increasing accountability over deciding on funding suppliers for his or her pensions planning.
“We’re centered on growing our vary of revolutionary sustainable options to assist people determine and choose investments that may make an actual impression and enhance their retirement security, aligning with the demand from particular person traders that their investments replicate their values.
“To spotlight our dedication to this demand, Natixis IM goals to make sure €600bn, equal to 50 per cent of AUM, is channelled into sustainable or impression investments by 2024.”
Natixis IM’s International Retirement Index examines 18 efficiency indicators of retiree welfare in whole, grouped into 4 sub-indices: the fabric means to reside comfortably in retirement; entry to high quality monetary companies to assist protect financial savings, worth and maximize revenue; entry to high quality well being companies; and high quality of life, together with a clear, protected atmosphere to reside in.