In the OECD pension model, the UK has one of the largest pension gaps of OECD countries, at 25 per cent. This means that it needs relatively high private pension contribution rates to close the gap.
The figure builds on the idea of the pension gap (see Pension Trends Chapter 6, section 2. Replacement income) to explore the contribution rates required in voluntary pension schemes to achieve the average gross replacement rate of OECD mandatory pension systems (57%).
For simplicity and comparability, the OECD calculations assume that people with voluntary pensions have a private DC pension plan. The analysis also assumes full work histories: people enter the labour market in 2006 at age 20 and work continuously until State Pension Age (SPA), which differs from country to country. As the model assumes unbroken work histories, it does not take into account the variations which exist between countries in average length of work histories.
Readers should note that the source information from OECD in this section has not been updated since the 2011 edition of this chapter. The estimates in this section are not National Statistics.
Source: Office for National Statistics
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