There are few countries that have a flat rate system (as the UK does). Many, including France, have a salary and contributions (a pay-roll tax) system.
In Germany, for example, the state pension guarantees 51% of an individualās average earnings, and the payroll tax is 19%, half paid by employees, half by employers. In the US, social security is based on your 15 highest earning years (you have to have paid in for much longer to get the full amount, obviously).
France, as far as I understand it, has two types of compulsory pension, neither private.
The basic state pension pays a maximum of 50% of average earnings, and is based on the highest 25 years salary and how much was paid in social security contributions by employees and employers. Workers need to work for 42 years to get a full state pension. Plus, there is a range of compulsory occupational pensions where employees and employers have to contribute an extra amount, which work on a points system depending on someoneās salary and profession. Private pensions are rare.
If you look at what percentage of GDP countries spend on state pensions, the UK is absolutely one of the worst, spending about 4.5% (and that includes pension payment tax relief) compared to Franceās 12% (Germany is about 8%, and the US 7%).
Thatās broadly reflected in pensioner poverty, so about 16% of British pensioners (all of them, not just those only on state pensions) live in poverty, compared to 4% in France Itās 10% in Germany and a genuinely shocking 23% in the US - largely because of health care costs, I think, just in case you ever wondered if the NHS is worth it.
A 2022 government report (Pensions: international comparisons Research Briefing) found that even once state and private pensions were aggregated, the UK had a lower-than-average āreplacement rateā than the average EU country. Replacement rate is a measure that compares pension earnings to previous income.
āThe analysis shows that the UK has an overall net replacement rate of 58.1% from mandatory pensions for an average earner, below the OECD average of 69.1% and the EU average of 70.8%.ā
Obviously, that will have increased a little because pensions rose above wage increases in 2023 and 2024, but it wonāt be a significant change.