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A pension savings boost could " improve financial security" for UK households. The UK's pension system has been awarded a B rating with economists calling for improvements to be made. The UK was graded “B” in the 17th annual Mercer CFA Institute global pension index – alongside several other countries such as Canada, New Zealand, France, Mexico, Belgium, Croatia, Germany and Ireland. Countries which received an “A” grade included the Netherlands , Iceland, Denmark, Singapore and Israel. Those rated “B-plus” included Sweden, Australia, Chile, Finland and Norway. READ MORE State pensioners getting free £150 separate to Winter Fuel Payment this week The report noted that in the UK the minimum contribution rate under auto-enrolment is 8%. This is made up of employer and employee contributions and tax relief. It said the overall “index value” for the UK system could potentially be increased by further increasing the coverage of employees and the self-employed in private pension schemes and increasing the scope and contribution levels required under auto-enrolment “to deliver increased financial security for more people”. Tess Page, UK wealth strategy leader at Mercer said: “There has been little real change in the ranking of the UK since the last report. “We have an opportunity with the Pensions Commission to make real changes in the UK. If we increase the scope of employees covered by private pension schemes and increase the levels of auto-enrolment, we could improve outcomes for current and future generations of UK workers. “We believe there is a unique opportunity to modernise our pension system, to not only increase financial security for pension members, but to also contribute more directly to the growth of the UK economy. “Mandating parts of the investment strategy, as contemplated under the Mansion House Accord, should not form part of the Government’s roadmap. We would instead like for the Government to work with the industry to develop a pipeline of investment opportunities and to create a globally competitive business environment, rather than introducing measures such as mandating investments.” Margaret Franklin, president and chief executive of CFA (Chartered Financial Analyst) Institute, said: “As some systems look to pension funds to drive investments that are considered in the national interest, the professional investment community must guard against the unintended consequences that may arise when mandates or restrictions distort the system. “As the index makes clear, the central purpose of pensions must remain to secure retirement income, guided by fiduciary duty above all else. Pension systems work best when they balance innovation and national priorities with the enduring responsibility to serve end-investors’ interests.”
