British pension schemes ‘among worst performers in developed world’

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Pensions and Saving

British pension schemes ‘among worst performers in developed world’

UK consumers are seeing their savings squeezed by the poor performance of pension schemes, according to a new international report.

Analysis from the Organisation for Economic Cooperation and Development (OECD) has revealed that British savers have seen bigger losses from their workplace pensions over the last ten years than almost any other developed nation.

The Telegraph has highlighted findings showing that returns on cash invested by pension companies on behalf of savers fell every year between 2001 and 2010, in contrast to all other developed countries assessed, apart from the US and Spain.

According to the report, this could mean that many people in the UK will face the prospect of being left with an inadequate amount of savings to live off when they reach the age at which they were planning to retire.

Darren Philp, policy director at the National Association of Pension Funds (NAPF), stated that the “exceptionally weak worldwide economic environment” is to blame for this problematic trend.

He said: “UK funds are broadly in line with the global average but that performance is disappointing nonetheless.

“The UK will struggle to pay for its retirement and the weak returns of recent years make it even more important that we improve these pensions.”

Earlier this month, data was published by the Office for National Statistics (ONS) revealing that poverty levels among people aged 65 or older are significantly higher in the UK than other parts of Europe.

Meanwhile, another ONS report also suggested that the number of people working past the state pension age has nearly doubled over the past 20 years.

Mr Phillip of the NAPF said this is not a problem if it is by choice, but suggested that for too many people, the decision is forced upon them because they simply cannot afford to leave.

He observed that this issue could be set to “become a painful reality for millions” over the coming years.

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