How does Australia's pension system rate compared to the rest of world?
A report on retirement outlooks for 50-year-old women has some interesting insights into how Australia’s pension system compares to the rest of the world.
The International Pension Gap Index, put together by wealth management firm UBS, compared the basic mandatory pension systems of 12 countries to see which one provided the best retirement income. And you might be surprised how well our system performed (especially if you’re struggling to make ends meet on the age pension).
Australia came in second in the rankings, with UBS determining our retirement had the capacity to provide 72 per cent of a working woman’s salary, which was a touch behind top performer Singapore which provided 73 per cent.
According to the report: “People often don't think about retirement until they are nearing the end of their working life. But our analysis shows that relying purely on mandatory pension systems no longer makes sense, as they only insure a minimum income to cover basic needs in old age. No matter where in the world you live, you are likely to face a pension gap – in other words, your costs will exceed your retirement income.
“We conclude that private savings are crucial for retirement, no matter where in the world you live.”
Here’s where the top 12 cities ranked:
1. Singapore: 73 per cent
2. Sydney: 72 per cent
3. Paris: 69 per cent
4. Milan: 67 per cent
5. New York: 55 per cent
6. Tokyo: 55 per cent
7. Munich: 50 per cent
8. Zurich: 48 per cent
9. Toronto: 42 per cent
10. London: 41 per cent
11. Hong Kong: 41 per cent
12. Taipei: 32 per cent
What’s your take on the results?