Countries Need More Preparation for Increase in Global Retirement Numbers, Report Indicates

Citizens and governments need to prepare now for retirement with solid savings and good policies, according to a recent retirement report.

With over 600 million people that are 65 years and older, retirement systems around the world have been feeling the pressure. Many countries face a serious risk of funding shortfalls for pension funds.

The global pension deficit has been estimated to be about $400 trillion by 2050. Half of that will be in just six countries: the US, UK, Netherlands, Canada, Japan and Australia, the Natixis 2017 Global Retirement Index (GRI) report states.

In Europe about one in four citizens rely on pension funds. That number is expected to increase to one in two in the coming years, signifying a need for both citizens and government to be organized. China also needs to prepare as it has been estimated their working population will decrease by 23 per cent by 2050, the authors of the report wrote.

The Index calls for smarter government policy that will encourage citizens to save for retirement as well as sound fiscal decisions when it comes to public pension funds.

Top Ranking

The top 10 countries in the GRI are Norway, Switzerland, Iceland, Sweden, New Zealand, Australia, Germany, Denmark, Netherlands and Luxembourg. Yet only four of them rated high in the finances sub-index including New Zealand, Switzerland, Australia and Norway. A high tax rate and public debt hindered the other countries in this category.

Those in the top 10 had high quality of life ratings and ranked eighty or above in the health index. Luxembourg ranked the highest with 92 per cent for health while Norway had the highest material well being ranking among the top 10 at 91 per cent.

Canada ranked 11th place overall and the United States placed 17th.

Among the 18 performance indicators researchers examined, North America ranked higher than Europe in the Finances and Health sub-indices. Part of the lower score for Europe was the financial difficulties in Italy, Spain and Portugal, which brought down the region’s total score. Taxes as well as high levels of public debt prove to be a hindrance to Western Europe.

Although Singapore, Chile, South Korea and Estonia rated high in the financial sub-index they were not highly rated overall, something the authors of the report said was due to a lack of stable and robust government finances.

North America also come out on top when it come to regional rankings with 73 per cent followed by Western Europe at 70 per cent. Eastern Europe and Central Asia took third place with 50 per cent, Latin America was at 46 per cent and the Asia Pacific region came in last at 34 per cent.

“Were it not for China and India, two countries with the largest populations in the GRI and some of the lowest overall scores, Asia Pacific would have a much higher regional score,” the authors wrote.

However, researchers have cautioned that during their research they only consider mostly developed countries and may not include all countries in the region for the GRI.

Changes in Country Positions

Several countries saw some changes in their ranking including a one percentage point increase for Western Europe while Eastern Europe remained the same as last year.

Denmark also saw a positive move to 8th place up from 12th in the previous report because their quality of life and material wellbeing rankings improved. Ireland and the Czech Republic also moved up two spots as their material wellbeing, finance and quality of life ratings improved. Malta moved up two spots thanks to an increase in its health, quality of life and material wellbeing ratings.

However, Austria, Canada and Finland all declined in their overall score, which made room for Luxembourg to move up three spots.  The US also fell three spots because of the decline of income equity, happiness and life expectancy indicators. This cleared the way for Belgium to move up.

Singapore dropped out of the top 25, allowing the Slovak Republic to move up as a result of improvements in all categories.

Retirement Planning

A fair amount of those surveyed indicated they believed there would be access to a government pension for them. Researchers wrote that seven in 10 aged 53-71 had indicated they believed the benefits would be available while six in 10 of those under 53 indicated they believe government pension funds would be available for them.

Those respondents who specified they would be relying on secondary incomes stated they would largely be using in retirement include personal savings (90 per cent), personal investments (79 per cent), workplace savings (76 per cent) and Social Security (70 per cent). Sixty-three per cent also indicated they would rely on their partner or spouse’s savings and 51 per cent indicated they would be liquidating assets like a home or business. Survey participants also told researchers they expected to rely on family, including 45 per cent who are looking for an inheritance and 41 per cent will be looking to their children.


The report authors wrote that their survey results demonstrated a need for good policies by governments. They also encourage citizens to be aware of their needs and plan ahead. While some countries improved their ranking on the Index other countries, including Canada and the United States fell indicating a lack of readiness for the increase in pensioners that has been predicted to increase in the coming years.

By developing robust policies towards pension funds and encouraging citizens to organize secondary incomes for their older years.

The Global Retirement Index is put together by Natixis Global Asset Management and CoreData Research. This is the fifth year the report has been published.

-Written by Chandra Lye

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