Aviva’s ‘Euro 2016 Pensions Ranking’ analyses international data to judge which nation may have the winning pensions team, based on five key ingredients:
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experience (life expectancy)
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youth (fertility rate)[1]
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stamina (% of population in employment aged over 65)
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strength of squad (dependency ratio)[2]
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investment (percentage of GDP spent on pensions).
Aviva’s results turn world football rankings on their head.
The contenders
· Experience: Iceland win on “experience”, with a male life expectancy at birth of 80.2 years – 3 years above the Organisation for Economic Co-operation and Development (OECD) average.
· Youth: Turkey win on “youth”. Their youth squad is boosted by a healthy fertility rate of 2.07 – 0.4 above the OECD average. (This is the number of children estimated to be born to each woman during child-bearing years.)
· Stamina: Iceland also win on “stamina”. A staggering 53% of their over-65s are still in employment – 33.1% above the OECD average.
· Strength of squad: Turkey’s strong fertility rate also drives it to win on “strength of squad”. An old-age dependency ratio of only 13.1 suggests its future resources run deep. This means every 100 people of working age in Turkey are required to support 13.1 people in retirement. This is 14.2 below the OCED weighted average, where every 100 people of working age have the challenge of supporting 27.3 people in retirement.
· Investment: Italy win on “investment”. They spend a bank-busting 15.8% of their GDP on pensions – twice the OECD average of 7.9%.
Our home nations are solidly mid-to-lower table. England, Wales and Northern Ireland are ranked 9th, 14th and 22nd out of the 24, respectively. England has a top 4 ranking for “experience” (life expectancy) and Northern Ireland has top 2 for “youth” (fertility rate), but all are held back by weaknesses in “squad strength” (old-age dependency ratio) and “investment” (public expenditure on pensions).
The winner?
Looking across all component parts, the team with the strongest mix is footballing underdog, Iceland.
Aviva awards Iceland an overall score of 86 out of 120. Despite being bottom of the “investment” league (public expenditure on pensions), it has a stellar team when it comes to “experience” (life expectancy) and “stamina” (over 65s in employment).
Commenting on the analysis, Alistair McQueen, Savings & Retirement Manager at Aviva said:
“Our Euros pension league table turns the established football rankings upside down. While the top stars probably don’t have to worry too much about their pension, it is a different story for most of us who will be sitting watching. So maybe it’s time to forget the pundits and think pensions. Plan carefully, invest for the long term and maximise your resources.
“Iceland for the cup? You read it here first!”
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