UK drops in pension security rankings; global concerns persist amid Covid-19


UK dropped one spot to rank 18th out of 44 countries in retirement security, according to Natixis Investment Management 2021 Global Pension Index, while Iceland maintained its number one ranking for the second year in a row.

As reported by our sister title, European pensions, Switzerland and Norway were second and third respectively, followed by Ireland, the Netherlands, New Zealand and Australia, with the top seven occupying the same positions as last year.

Germany and Canada, meanwhile, swapped places, the first moving to eighth and second to tenth, while Denmark remained in ninth place overall.

The UK, however, fell one spot in the rankings to 18 of the 44 countries included in the index, with its overall country score remaining at 72%.

This lower ranking was attributed to a decline in three sub-indices: quality of life, health and finances in retirement, with the UK ranking seventh, 18th and 29th respectively for these sub-categories.

Despite the drop in rankings, the UK still has several top ten indicators, with water and sanitation ranking first, for example, while biodiversity ranks 4th and air quality at the 10th.

The report also revealed a number of regional highlights, with Western Europe the second highest region with an overall score of 69%, despite being the highest rated region for health and quality of life. .

Eastern Europe and Central Asia, meanwhile, ranked third as a region with 50 percent, with four of the bottom 10 countries in finance included in this region, including Turkey, Hungary, Slovak Republic and Latvia.

Asia-Pacific, however, was found to have the lowest overall regional score of 32 percent, with that region receiving the penultimate or penultimate score in three of the four sub-indices.

More broadly, the Natixis IM report highlighted that the risks presented by inflation, interest rates and public debt, and the financial challenges of employment and health have been exacerbated by the Covid pandemic. 19, warning that retirees are particularly vulnerable to low and rising rates. inflation.

He also warned that while there is optimism about the double-digit returns markets have achieved since Covid’s March 2020 slowdown, sentiment shows investors are much less optimistic about the safety of retirement.

In particular, Natixis’ global survey of individual investors showed that seven in ten people believe they will be financially secure in retirement, while 40 percent of investors expect that “it will take a miracle ”to a safe retirement, with 45 percent so concerned about retirement that they avoid thinking about it altogether.

He also noted that changes in the retirement landscape have made matters worse, with eight in ten respondents realizing that the shift from defined benefits to defined contributions has placed an increasing responsibility on the individual to fund their retirement.

Additionally, following the switch to CD, the “vast majority” (80 percent) said they would be more likely to work for a company that offered equivalent pension contributions, while seven in ten said that investments that reflect personal values ​​would encourage them to save more.

Commenting on the results, Natixis IM Head of Northern Europe, Andrew Benton, said: “We are at an interesting inflection point where the responsibility for a secure retirement shifts from employers to individuals.

“Access to an appropriate retirement savings vehicle combined with incentives to save is essential for individuals, who increasingly have the responsibility of selecting investment providers for their retirement planning.

“We are focused on developing our range of innovative sustainable solutions to help individuals identify and select investments that can have a real impact and increase their retirement security, in line with individual investor demand that their investments reflect. their values.

“To underline our commitment to this demand, Natixis IM aims to ensure that 600 billion euros, or the equivalent of 50% of assets under management, are invested in sustainable or impact investments by 2024.”

Natixis IM’s global retirement index examines a total of 18 performance indicators for the well-being of retirees, grouped into four sub-indices: the material means of living comfortably in retirement; access to quality financial services to help preserve savings, value and maximize income; access to quality health services; and quality of life, including a clean and safe environment.

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