UK has biggest individual pensions gap in Europe

Article date: 22 September 2010

  • UK adults must put away on average £10,300 a year to close gap

The UK has the largest pensions gap per person in the whole of Europe according to research released today.

A new in-depth study by Aviva - which looks at the pensions gap across a number of European countries, including the UK - defines the UK's pensions shortfall as £318 billion (€379 billion). This means UK adults need to put away an average of £10,300 every year in order to close the gap. The research, carried out by Aviva in conjunction with Deloitte, was conducted to quantify the current gap, with a view to tackling this growing issue.

The pensions gap refers to the difference between the income needed to live comfortably in retirement, and the actual income individuals can currently expect.1

The following table2 shows the scale of the UK’s gap compared to other European countries. It shows the average pensions shortfall for all individuals retiring between 2011 and 2051:


Annual pensions gap per person

Annual pensions gap by country

United Kingdom

£10,300   (€12,300)

£317.5 bn       (€379.0 bn)


£9,700     (€11,600)

£392.7 bn        (€468.8 bn)

Republic of Ireland

£7,600     (€9,100)

£16.9 bn          (€20.2 bn)


£6,600     (€7,900)

£204.0 bn        (€243.5 bn)


£5,900     (€7,000)

£142.9 bn        (€170.5 bn)

Total across Europe 3


£1.6 trillion    (€1.9 trillion)  

The UK gap of £10,300 (€12,300) is an average based on the 31 million UK adults who are due to retire between 2011 and 2051.

However, the problem is even more acute for older people who have less time to make good their personal shortfall. It could also particularly affect those on lower incomes, for whom setting aside money may be more difficult.

For those fast-approaching retirement, the issue is urgent. For example, assuming a retirement age of 65, a 50-year-old still has 15 years in which to invest. However, someone in their 60s has much less time to make up a considerable shortfall. The table below2 provides an overview of the UK pensions gap by individuals’ ages in 2010.


Age in 2010

All individuals retiring 2011-51 up to age 65


50 years

40 years

30 years

20 years


£6,200 (€7,400)

£3,100 (€3,700)

£1,800 (€2,200)

£1,300 (€1,500)

Toby Strauss, Aviva's UK Life CEO says: "While it has long been said that there is a pensions gap in the UK and beyond, this new study actually puts a figure on the shortfall. The findings are startling, with a UK shortfall of £318 billion annually.

“We know from our research that many people in the UK are planning to work later into life, but this will not solve the issue fully. However, the problem is not without solution. By investing from an early age, even a small amount can make a big difference in closing the gap. The younger a person is when they start putting money away, the more time they have to build up a sufficient fund to provide the lifestyle they desire in retirement.

“Today’s research should act as a wake-up call for individuals and governments across Europe, particularly in the UK. Fortunately it is not too late for people to take action. Aviva believes that effective partnerships between the Government and the private sector are crucial to solving this problem.”

Making sense of the pensions gap
To help people better understand pensions and to aid retirement planning, Aviva is launching a new iPhone app. Available to be used on Apple’s iPhone, iPod touch and iPad, the free download is a simplified version of the Aviva Pensions Tracker, which allows Aviva customers to plan their investments.

The features include illustrations of the income individuals might expect in retirement using many different projections, so people can understand how different investment methods could affect their retirement income. 

In addition, Aviva has this week launched a series of print and radio adverts to encourage younger generations to start putting money aside for the future. 

A copy of the full report detailing the UK pensions gap is available at A report of all European countries studied can be found here.


For further information, please contact:
Sarah Poulter
Aviva Press Office 
Telephone: 01904 452828 / 07800 691569

Josephine Salm / Julia Fea
Grayling PR
Telephone: 020 7932 1850
E-mail: /

Notes to editors:

1 The annual pensions gap is based on an analysis of the annual retirement income gap individuals face in retirement and the additional investment they require to close this shortfall.

This research assumes a 70% replacement rate for the "average" individual as recommended by the Organisation of Economic Cooperation and Development (OECD).

  • The model is on an “as-is” basis (ie assets don’t accumulate interest and there is no inflation).
  • The 60-64 year age group is 4.87% of population for each country.
  • The number of people in the age band 60-64 remains fixed over the next 30 years (ie no account is taken of ageing populations).
  • Retirement age of 65 in each country except France (which is 60).

2 Figures in GB pounds are based on an exchange rate of EUR = 0.838557 GBP  / 1 GBP = 1.19252 EUR as provided by on 16 September 2010. Figures have been rounded to the nearest £100 / €100 for individual pension gaps and to one decimal place for national figures.

3 Europe’s annual "pensions gap" stands at €1.9 trillion, according to the results of the first comprehensive analysis of the retirement landscape in Europe. Copies of Aviva’s report “Mind the Gap – Quantifying the Pensions Gap in Europe”, a selection of individual country reports and technical details can be found at

The value of investments can go down as well as up and what you get back may be less than invested and is not guaranteed. 

About Aviva

  • Aviva is the world’s sixth largest* insurance group, serving 53 million customers across Europe, North America and Asia Pacific
  • Aviva's main business activities are long-term savings, fund management and general insurance, with worldwide total sales of £45.1 billion and funds under management of £379 billion at 31 December 2009 
  • We are the largest insurance services provider in the UK and one of the leading providers of life and pensions products in Europe  
  • The Aviva media centre at includes images, company and product information and a news release archive
  • For broadcast-standard video, please visit
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* based on gross worldwide premiums at 31 December 2009

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