Retirement security in the UK has improved over the past year and reached a record-high position of 14th place on the Natixis Investment Managers (IM) Global Retirement Index (GRI), the firm has revealed.

The UK rose two places in the index over the past year, outperforming France, Finland, Sweden, and the United States, with the improvement driven by increases in health spending per capita.

Overall, the UK scored 74 per cent on its retirement security, up from 67 per cent and 73 per cent in 2022 and 2023 respectively.

Its performance was largely attributed to steady improvements in the GRI’s ‘Health Retirement’ sub-index, which measures life expectancy and health expenditure, where the UK’s score rose by 3 percentage points to 84 per cent.

However, despite a six-place improvement for the UK since 2014, Natixis IM noted that individuals were increasingly feeling the strain of funding their own retirement due to rising unemployment and income inequality.

The UK experienced a slight improvement in the ‘Material Wellbeing’ sub-index, rising from 22nd to 21st place, with rising employment and income inequality continuing to weigh heavily.

It maintained its score in the ‘Finances in Retirement’ sub-index, which resulted in a three-place fall to 18th in the category.

In the ‘Quality of Life’ sub-index, the UK maintained its position in 11th place.

Looking at the rest of the GRI, Switzerland knocked Norway off the top stop with a score of 82 per cent, while Iceland maintained its third place ranking despite declining in most sub-indices.

Ireland took the number one spot in the Finances in Retirement sub-index due to the steady reduction of government debt.

Commenting on the report, Natixis IM head of Northern Europe and MEACA, Andrew Benton, said: “The past few years have seen some big shifts that impact our finances and plans for the future: The ongoing transition from defined benefit to defined contribution pensions, rising public debt bills, short term shocks like Covid, and geopolitical tensions firing up inflation, all of which drive anxiety about financial futures for individuals.

“Whilst retirement security has improved in the UK, individuals are increasingly taking their retirement security into their own hands, given the changing market backdrop.

“In light of this shift, financial services providers need to be more proactive in helping people to save more – to and through retirement - by offering better support and solutions that are tailored to today’s environment and individual retirement needs, including access to both public and private markets if we are to help prevent a retirement crisis down the line.”

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