The UK pensions system has been ranked 14th in the 2026 Marsh CFA Institute Global Pension Index, as while recent reforms are expected to improve retirement outcomes over time, challenges with adequacy and sustainability persist.

According to the index, which compared 55 retirement income systems and covered 66 per cent of the world’s population, the UK pension system has been given an overall B grade, and a total score of 71.6, ranking behind countries including Kuwait, Saudi Arabia and Switzerland.

Marsh said that, in the UK market, recent reforms introduced through the Pensions Schemes Act 2026 and the work of the Pensions Commission are expected to improve retirement outcomes over time, particularly through the planned introduction of guided retirement, which could strengthen support for savers entering decumulation.

However, analysis suggested the changes were unlikely to be a complete solution, with international comparisons indicating that pension adequacy will continue to depend on higher levels of retirement saving, with a broader base of the population covered by automatic enrolment.

On the sustainability of the UK pensions system, Marsh said the discussions around the potential changes to the state pension triple lock might also have a positive impact, alongside fiscal incentives to ensure patient long-term pensions capital is invested in productive assets.

Overall, the index revealed that as fertility rates continue to fall and life expectancies rise, the world’s retirement income systems face increasing pressure.

Commenting on this year’s index, Marsh global defined benefit/defined contribution leader, Christine Mahoney, said: “Pension systems are under real strain.

“Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements for the generations ahead.”

Marsh said the 2026 index highlighted the need for clear objectives for pension systems, prioritising funding of future retirement obligations and more flexible pension products and retirement age structures to address demographic change.

It argued that traditional retirement ages of 60 or 65 are becoming increasingly outdated as people live longer, healthier lives and the distinction between work and retirement becomes less defined.

Marsh Investments and Retirement partner, Tim Jenkins, said: “The data make clear that even the best-performing systems need to keep evolving; no system can afford to stand still in the face of these demographic shifts.”

He added: “Retirement design must become more flexible – in when people access income, in how products are structured, and in how we think about the line between work and retirement. That flexibility is no longer optional.”

Netherlands’ pensions system ranked at the top of this year’s index, followed closely by Denmark, Iceland and Singapore.

This year, the pensions systems in Australia, UAE, Oman, Panama and China improved their index grade, and the average value for the overall index increased by 1.1 points from 2025.

CFA Institute Research and Policy Center managing director, Mona Naqvi, concluded: “Retirement systems differ across markets, but all face the same long-term challenge: delivering reliable income as demographics shift and markets change.

“No single policy or investment decision can achieve that. It takes sound system design and governance, alongside careful oversight of investments by those with a fiduciary duty to savers and retirees.

“The test is whether those decisions work together to serve people throughout retirement, and remain sound for the generations that follow.”

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