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OECD: UK has one of the least generous state pensions


The UK state pension has been found to be one of the least generous in the world, according to a report from The Organisation for Economic Co-operation and Development (OECD).

The report from the international think tank found that out of the 34 countries who are members of the OECD, 31 countries have more generous pensions than the UK. Only two countries pay poorer pensions, Mexico and Chile.

The report, called Pensions at a Glance, compared the pensions people received to the salaries people earned while working. For those earning an average salary in the UK, it found that the so-called replacement rate was 38.3. This means that UK pensioners earn just over a third of what they do when they are working.

The basic state pension in the UK is currently £115.95, but will rise to £119.30 in April 2016.

Tom McPhail, the head of retirement policy at Hargreaves Lansdown said:
"This analysis makes embarrassing reading for the politicians who have been responsible for the UK's pensions over the past 25 years.

"The state pension was in steady decline for years and even now, is improving for lower earners but average payouts will not be rising."

When private pensions are taken into consideration, the UK comes 15th out of 34 countries, with the rate of replacement for all types of pension being 71.1.

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