Image copyright Getty Images

The UK's State Pension is the least generous of all the most advanced economies in the world, according to a new report.

A study by the Organisation of Economic Co-operation and Development (OECD) suggests full-time workers in the UK do relatively poorly.

The report found that the average pensioner can expect to receive just 29% of what they earned at work.

Only South Africa - which isn't a member of the OECD - is less generous.

However, once "voluntary" pensions - such as auto enrolment or workplace pensions - are taken into account, the UK model fares better in comparison.

Even so, the pension systems in Japan, Germany, France, Italy, the United States, Canada, the Netherlands and Ireland all pay out a higher proportion of working income.

When voluntary pensions are included, the average UK pensioner receives 62% of his or her working income. This is still lower than the OECD average of 69%.

'Cliff edge'

The TUC said the government needed to improve the way the pension system works in the UK.

"The OECD has confirmed what we have long suspected - the UK is bottom of the league for pension provision," said Frances O'Grady, the TUC's general secretary.

"Working people in Britain face the biggest retirement cliff edge of any developed nation."

Image copyright Getty Images

Since 2010 the state pension has been protected by the so-called triple lock, meaning that pension pay-outs have risen by the highest of earnings, inflation or 2.5%.

However the 2.5% element of the triple lock is due to end in 2020.

In response to the OECD report, the government pointed out that 11 million people will be saving into a workplace pension by 2018.

It said the State Pension was now more generous than it was.

"We have taken decisive action to address our changing population through a new, generous State Pension, retaining the triple lock and protecting the poorest through Pension Credit - reducing pensioner poverty close to historically low levels," a spokesperson for the Department of Work and Pensions said.

"But there's always more to do."

Discrimination

A separate report, from the Pension Protection Fund (PPF), declares that defined benefit pension schemes in the UK are increasingly investing in bonds rather than shares.

That suggests such schemes are becoming much more conservative, and risk-averse.

Back in 2006, 61% of scheme assets were invested in equities. By 2017 that number had fallen to 29%.

By contrast the percentage of assets held in bonds has risen from 28% to 56%, making such investments less volatile, but less likely to grow in value.

Some experts are critical of this trend, which they say could discriminate against younger workers in defined contribution schemes.

"Of all investors in the UK, final salary schemes should be able to take the most patient, long-term view of asset allocation and investment risk, yet they have become increasingly short-term and conservative in their strategy," said Nathan Long, pensions expert at Hargreaves Lansdown.

"This comes at the expense of the auto-enrolment generation who desperately need higher levels of contribution directed into their modern day pensions."