Britain is langishing behind other European nations in pensions while Spain surges ahead despite the cost of living in the UK being more expensive.
The UK ranks 16th in a list of 30 for what it hands out in state pensions, handing out £802.32 a month compared to the £2,287.24 dished out in Spain, which tops the list and has a monthly cost of living of £561.43 compared to Britain’s £688.04.
Almond Financial researched the pension breakeven index showing how the UK state pension compares to the rest of Europe.
It found Britain pays just £114.28 more in state pension than the average cost of living for a pensioner on the continent.
The data has been calculated on the basis that the majority of pensioners in these countries are mortgage-free.
The Index states pensioners will be left with “not much room to manoeuvre” when it comes to their finances and battling the cost-of-living crisis.
With household bills rise, monthly costs could significantly change, and pensioners may need to find extra cash to sustain their lifestyles in retirement.
The UK ranked on the lowest level above the breakeven point for pension income, meaning that pensioners in countries that ranked 15 and above have more disposable income.
Although the UK pays 16.61 percent above the breakeven point, monthly costs have been rising significantly over the last few months due to wholesale energy prices and food.
The maximum UK state pension pays a total of £802.32 per month to retirees and at the time of writing, recent data stated that the monthly cost of living for a single person (excluding rent) is £688.04.
In Spain, state pensioners can benefit from a maximum of €2,617.53 per month (£2,287.24).
As Spain also enjoys a low cost of living, state pensioners can enjoy their retirement with their income being 407.40 percent over the breakeven point – almost 300 percentage points above Britain.
In second place was Belgium, as pensioners who have worked for 45 years can get up to €3,100 per month.
Although not particularly low, the monthly cost of living for a single person in Belgium (excluding rent) is €822.17 (£720.45) but thanks to the generous pension, retirees are still likely to feel comfortable.
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Luxembourg, Bosnia and Herzegovina, and Cyprus take third, fourth and fifth spots on the index.
In comparison, some countries fall behind the breakeven point according to this research.
These include Sweden, Moldova, Finland and Belarus, where many pensioners might struggle with the cost of living.
Armenia ranked bottom of the Pension Breakeven Index as the state pension system pays the equivalent of £67.79 to those eligible, despite average monthly living costs of £506.81.
Appearing second last in the index is Georgia with a monthly pension payment of £82.34 per month for retirees, despite average living costs of over £477.
Commenting on the results of the research Sam Robinson, Principal Financial Adviser at Almond Financial 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.
“Closer to home, the UK has a system that is just above the breakeven point which means at present, there isn’t much room to manoeuvre for those battling the cost-of-living crisis. And while it is positive that the UK finds itself among the top half of countries, for how much longer is the question.
“While the increase in state pension in line with inflation is needed and welcomed, it’s clear that those over 66 need to look at other options rather than just relying on the state pension. Planning for life after work is crucial and it’s important to seek advice from a pension advisor if you aren’t sure where to start.”
Top 30 countries – Pension paid out per month
1 Spain £2,287.24
2 Belgium £2,709.93
3 Luxembourg £3,050.57
4 Bosnia and Herzegovina £979.72
5 Cyprus £1,485.81
6 Liechtenstein £2,061.02
7 France £1,497.73
8 Denmark £1,647.56
9 Switzerland £2,123.54
10 Norway £1,579.78
11 Iceland £1,524.20
12 Ukraine £482.65
13 Bulgaria £670.66
14 Netherlands £1,102.34
15 Ireland £962.08
16 United Kingdom £802.32
17 Sweden £705.63
18 Moldova £357.54
19 Finland €703.45
20 Belarus £337.69
21 Albania £263.13
22 Romania £283.52
23 Montenegro £256.32
24 Croatia £312.68
25 Greece £335.65
26 Russia £216.07
27 Lithuania £173.90
28 Czech Republic £167.54
29 Georgia £82.34
30 Armenia £67.79
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