UK pensioners are among the least financially secure in Europe when state pension income is compared to the cost of living, new analysis has found.
The 2026 Pension Breakeven Index by Almond Financial reveals the UK state pension sits just 26% above the breakeven point, leaving retirees with a monthly surplus of around £220 after covering basic living costs.
While recent increases to the state pension have improved the overall picture, the UK continues to lag behind several European countries, including Ireland and France, receiving just £1,045 in pension payments each month, against monthly living costs of £825 for a single person.
The annual study is based on a comparison of pension income against average monthly living costs across Europe, with countries ranked on how far pensions stretch beyond essential spending.
Luxembourg remains the strongest-performing country, with pension income exceeding the cost of living by more than 500%.
The average monthly pension of €6,617 (£5,719) is significantly higher than typical living costs of around £931, meaning retirees receive more than six times what is needed to cover essentials.
Norway ranks second, with pension income sitting more than 240% above the breakeven point, despite relatively high living costs.
Spain completes the top three, where lower living costs and a strong pension system leave retirees more than 115% above breakeven, reinforcing its position as one of Europe’s most accessible retirement destinations.
At the other end of the index, Armenia ranks last for the fourth consecutive year, with pension income falling 86% short of the cost of living. Retirees receive just £118 per month against average costs of around £518.
Moldova also performs poorly, with pension income covering less than half of essential monthly spending.
Principal Financial Adviser at Almond Financial Sam Robinson, commented on the findings:
“The data is an interesting insight into just how well people can live when they retire right across Europe.
“For those approaching state pension age in Spain, retirement is a particularly enticing prospect with a healthy pension, low cost of living and not to mention the fantastic weather.
“This year’s increase to the UK state pension has offered a welcomed boost to pension income versus the cost of living, meaning pensions could feel slightly better off. Despite this, the UK state pension still rests just above the breakeven point, and remains weak compared to other pension systems across Europe.
“Planning for life after work is crucial, and it’s important to seek advice from a pension advisor if you aren’t sure where to start.”
For more information and to view the full study, please visit here.
