A comparison with the G7, the Netherlands and Australia shows why state pension payments alone cannot tell us how well a retirement system works.
Britain’s full new State Pension is £241.30 a week in 2026/27: £12,547.60 over 52 weeks. That is a full entitlement, not the average payment. Older retirees can receive the basic pension plus earnings-related additions; transitional rights can also affect new pension payments.19
The basic comparison problem is structural. Britain’s new pension provides a broadly flat-rate foundation. France, Germany and Italy provide earnings-related state pensions, replacing part of a worker’s former salary. Australia means-tests its Age Pension against income and assets. The Netherlands combines a flat-rate public pension with extensive occupational provision.67
For that reason, this comparison uses the G7 plus two useful alternatives: the Netherlands and Australia. It compares public provision, private pensions and actual household income. Converting monthly pension figures into pounds would obscure different contribution histories, household rules, taxes and living costs.
In the OECD’s latest comparable expenditure tables, Britain spends 7.1% of GDP on public old-age and survivor pensions. That is below France’s 13.4%, Germany’s 10.8%, Italy’s 16.1% and Japan’s 9.2%. Canada, Australia and the Netherlands spend less than Britain. These observations cover different years, clearly marked below.3
Private pension payments add 3.0% of GDP in Britain, compared with 0.3% in France and 0.7% in Germany. America’s private pensions pay 5.7% of GDP; Australia’s pay 4.5%. Britain’s published combined total is 10.0%, below France’s 13.7% but above Canada’s 9.4% and Australia’s 7.9%.4
Analysis: private provision narrows some gaps, but does not erase every difference. Nor is more spending automatically better: population age, the number of pensioners and retirement ages all influence the bill.3
The OECD also models a worker entering employment at 22 in 2024, earning the national average wage throughout a full career and retiring at the model’s normal pension age. The following percentages compare pension income with previous gross earnings. They are scenarios under the report’s rules and assumptions, not today’s pension payments.1110
| Country | Public only | With modelled private provision |
|---|---|---|
| United Kingdom | 22.4% | 44.7% |
| France | 56.6% | 56.6% |
| Germany | 42.1% | 53.4% |
| Italy | 70.6% | 70.6% |
| Japan | 36.5% | 36.5% |
| Canada | 37.1% | 57.7% |
| United States | 39.7% | 74.8% |
| Netherlands | 28.6% | 74.7% |
| Australia | 14.4% | 40.8% |
Source: OECD Table 4.2. The right column includes mandatory or quasi-mandatory private schemes and, where modelled, full-career voluntary saving. Blank voluntary entries do not mean nobody saves privately.7
For Britain, public provision replaces 22.4% of gross earnings in this scenario; adding the modelled workplace pension raises it to 44.7%. The Dutch figure rises from 28.6% to 74.7%. These comparisons show the importance of the second pension layer, while depending on continuous contributions and future investment returns.7
ONS reports that 82% of UK employees belonged to workplace pension schemes in 2024, following substantial growth after automatic enrolment began in 2012. That is employee participation, not coverage of every adult or proof of sufficient retirement saving.212
The usual automatic enrolment minimum is 8% of qualifying earnings, including at least 3% from the employer. In most schemes the earnings band is £6,240–£50,270: 8% does not necessarily mean 8% of the entire salary. Employers and employees can contribute more.8
There is also a difference between a defined-benefit pension, which promises an income, and a defined-contribution pot, whose outcome depends on contributions and investment performance. Treating both as simply “having a private pension” hides that distinction.1
The OECD’s household-income data put UK over-65s at 84.0% of the population’s average disposable income. That is close to Japan’s 83.9%, below France, Canada and America, and above the Netherlands and Australia. These figures include pensions, work and other income, after taxes, with adjustment for household size.5
These averages do not identify the best system for a particular person. They do not settle what renters, people with career breaks or those without workplace saving can afford. The observations lag publication, and full-career scenarios cannot establish what today’s younger workers will actually receive.
G7 countries plus the Netherlands and Australia, selected to compare public and private pension designs. OECD 2025 tables reproduce observed expenditure for 2021–2023 and income for 2020–2023, with years shown. GDP spending includes cash old-age and survivor benefits; it is not a benefit rate. UK private expenditure sums the reported 0.5% mandatory and 2.5% voluntary components; Japan sums 0.3% and 2.4%. Combined spending uses the OECD’s published totals, not sums of rounded inputs. Household income is disposable, equivalised using the square root of household size. Modelled rates are gross, for full-career average-earning men entering at 22 in 2024, and are presented separately. The right column uses “total with voluntary” where reported, otherwise “total mandatory”; voluntary schemes are modelled for Canada, Germany and the US. Modelled UK normal retirement age is 68, not today’s pension age. The model is the 2025 report’s policy snapshot, not a recalculation for October 2026 legislation. ASHE is an ONS employer survey, with the 2024 snapshot covering the pay period containing 17 April; results are provisional. The bulletin does not state an achieved pension-sample count or a single margin of error; uncertainty is reported through coefficient-of-variation bands. Annual UK entitlement is weekly rate × 52. No exchange-rate ranking or composite “best pension” score is used.