Shocking new statistics compiled by the Organisation for Economic Co-operation and Development (OECD) have revealed that the UK pays its retirees the worst state pension in the developed world. The basic payout of just £122.30 is the least generous of western nations, worth just 29% of average earnings. The Netherlands pays its pensioners 100% the value of the average wage, with Portugal paying 95%, Italy 93% and Austria 92%. The UK's state pension even comes behind poorer nations such as Mexico, Poland and Chile.
According to the former pensions minister Baroness Altmann, the future is even bleaker, warning that despite a recent overhaul to the pension system, payments will need to be cut further to avoid massive tax rises in future to pay for it.
She said: "We are one of the world's leading economies, but our support for the oldest in society is not fit for purpose."
"In April 2016, major reforms to the UK state pension were supposed to have made the system affordable for the future, reducing its generosity. Beyond the 2030s, the new state pension will be lower than the old system for most people and the lowest paid, predominantly women, will lose significantly from the new system."
"Despite this, the Government has been advised that the costs of paying state pensions will soar so much over the next 20 years and beyond that further cuts could be required."
Baroness Altmann called on the Government to do more to address the pensions crisis in the UK, including making private pensions more attractive to ensure more people are willing to invest in one of their own accords.
"To avoid burdening younger generations with significant tax rises, it is vital that more is done to boost private pension saving. Auto-enrolment is a good start, but the pensions industry needs to attract more customers to pay more into their pensions."