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Retirees in Australia, NZ among top 10 globally

Glenn Freeman  |  09 Aug 2017Text size  Decrease  Increase  |  

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Australian retirees are faring considerably better than many, ranking sixth behind a handful of European countries and New Zealand, but well ahead of the US and UK, a multi-national study has shown.

 

The Natixis Global Retirement Index, now in its fifth year, is the outcome of an annual survey conducted in a partnership between market research consultancy CoreData and Natixis Global Asset Management.

This year, eight of the top 10 countries are in Western Europe, led by Norway in first place, along with Switzerland, Iceland, Sweden, Germany, Denmark, Netherlands and Luxembourg.

The study focuses primarily on developed countries, considering 18 drivers of retiree welfare across four categories of health, finances, quality of life, and material well-being.

Within these, health measures life expectancy and health expenditure per capita, while finances includes measurement of old-age rates of dependency, inflation, interest rates, and tax pressures.

Quality of life includes general levels of happiness, environmental factors such as air quality, water and sanitation, and habitat. Material well-being covers income quality, income per capita, and unemployment.

 

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Australia retained the same overall position in this year's study as in 2016, increasing its quality-of-life score a few percentage points while dropping back slightly in the health and material well-being indices, which were down one point and four points, respectively.

The material well-being ranking fell two spots to 18 this year, "due to declines in the income equality and employment indicators," according to the report. Though Australia's health ranking declines, the report authors emphasise this is "mainly a function of other countries achieving competitive sub-index rankings, and does not necessarily reflect worsening healthcare conditions".

Australia continues to hold the seventh-highest life expectancy among the 43 countries covered in the study, and ranks fifth and ninth for finances and quality of life, respectively.

"The country performs very well in the finances sub-index. It is one of the only countries in the GRI to feature in the top 10 for both tax pressures and government indebtedness, indicating that its public finances are on a sustainable footing," says the report.

"It also ranks eighth in bank non-performing loans and seventh in the interest rate indicator. And while it still ranks favourably for governance, a slight decline in indicator score sees it fall one spot and out of the top 10."

Australia's quality-of-life sub-index improved 3 per cent, to 84 per cent from 81 per cent in 2016, because of environmental progress--the fifth-strongest improvement in this category overall. The report authors attribute this primarily to declines in CO2 emissions and increased prevalence of renewable electricity.

However, they also note Australia "still has the ninth-lowest score in this indicator, so further improvements are needed".

Our neighbours across the Tasman Sea ranked fifth overall--down from fourth in 2016--and took out second place in finances and sixth in quality of life. New Zealand's drop in the overall ranking is due to its ranking 19th in material well-being, the only sub-index in which it declined relative to last year.

Within the finance category, it was out-ranked only by Singapore, and only because of New Zealand's lower scores for both old-age dependency and tax pressure.

The report notes New Zealand still has the highest governance score of any country within the study, and ranks inside the top 10 for bank non-performing loans (second), interest rates (eighth), and government indebtedness (sixth).

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Glenn Freeman is a Morningstar senior editor.

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