Britain ranks highly for retirement among large economies despite slipping finances, Natixis index shows

Britain ranked among the better places to spend retirement in a new international study, placing second among the largest developed countries but 14th overall out of 44 advanced nations, according to the annual Global Retirement Index compiled by asset manager Natixis.

The index, which assesses health, quality of life, material wellbeing and finances in retirement, gave the UK an aggregate score of 72%. The country’s stronger performance among larger economies — moving up from third to second in that subgroup year-on-year — came as improvements in health indicators, notably life expectancy, outweighed modest declines in financial markers such as income inequality and unemployment.

Overall, Norway topped the Global Retirement Index this year, followed by Ireland and Switzerland, with Iceland and Denmark rounding out the top five. Natixis noted that smaller, wealthier countries such as Ireland and Iceland have been able to achieve faster recoveries and clearer policy consensus since the 2008 financial crisis, a pattern that has helped lift their rankings.

Within individual categories the UK recorded its largest gain in health, where improvements helped it move from 18th to 10th place as the country continues to recover from the pandemic. The UK remained 11th for quality of life for a third consecutive year and retained the top spot for clean water and sanitation, though it slipped slightly on air quality. Measures of subjective wellbeing fell: the UK’s ranking for happiness dropped from 18th to 21st.

Financial indicators were less favourable. Natixis reported that income inequality and unemployment in the UK deteriorated relative to other countries in the latest assessment, contributing to the country’s lower position when smaller wealthy nations are included in the overall ranking.

The study also polled respondents internationally about retirement fears and found that not having enough money to enjoy old age was the most widespread worry. Other top concerns included inflation, reductions in state benefits, insufficient personal saving, and the risk of exhausting assets due to care costs.

"Pressures on retirement across the globe are undeniable," said Andrew Benton, head of Northern Europe at Natixis Investment Managers. He said the index reflects growing concern that achieving retirement security is becoming harder amid volatility in personal finances, demographics, economic performance and policy. Benton noted that the UK government has signalled action, citing reforms announced in July intended to strengthen pension systems, expand choice and enhance consumer protections, and he said more measures are expected in the autumn Budget.

Analysts emphasised that rankings can differ markedly depending on the comparison set. Larger countries with more complex economies — including Canada, the United States, South Korea, Japan and France — were the comparator set in which the UK placed second. When Natixis broadened the field to include less populous but very wealthy European states, the UK’s position fell, underscoring the divergence in policy levers and demographic pressures between large and small economies.

Policy responses and market conditions will be closely watched by consumers and advisers as governments and regulators seek to shore up retirement outcomes. The Natixis index highlights both areas of progress, such as public health gains and infrastructure for water and sanitation, and persistent vulnerabilities in the labour market and household finances that could affect retirement security in the coming years.