European nations are providing their elderly citizens with nearly £8,000 more annually towards the equivalent state pension compared to what British pensioners receive. Iceland boasts the highest pension in Europe at £20,063.08 per annum, over £8,000 above the UK’s annual state pension of £11,973. The Organisation for Economic Cooperation and Development reportED that Iceland’s full basic pension is valued at ISK 3,439,428, equating to 31% of average worker earnings.
However, the cost of living in Iceland is approximately 40 to 50% higher than in the UK, meaning pensioners would almost double their expenditure on weekly food shopping, property and basic goods. The standard pension age in Iceland is 67, compared to the UK’s current 66, and full pension eligibility necessitates 40 years of residency.
Iceland also offers a pension supplement for single pensioners worth up to ISK 869,124 (£5,071) annually, representing 8% of average earnings.
UK pensioners are left with a mere £74.40 more than the average cost of living each month, according to research analysing all 50 European countries by pension advisors Almond Financial. This is down from around £115 in last year’s report.
Worryingly, the UK ranks 17th in Europe’s Pension Breakeven Index, falling one place from last year’s report.
The maximum UK state pension pays out £884.40 per month to retirees, whilst the monthly cost of living for a single person excluding rent stands at £810.40. This leaves pensioners just 9.18% above the pension income breakeven point.
Comparing state pensions against average living expenses such as food shopping, restaurant meals and energy bills, it’s clear which nations offer the most to retirees relative to their cost of living.
Luxembourg leads the European Pension Breakeven Index with its pension system paying out an average of €6,095.87 per month. This is a significant £4,327.47 more than the UK state pension each month.
Thanks to Luxembourg’s generous pension provision, retirees have substantial room for spending beyond basic living costs, unlike their UK counterparts.
