Norway has been ranked as the highest-performing country on Natixis Investment Managers’ Global Retirement Index 2023 for the second consecutive year with a score of 83 per cent.

The index, in collaboration with Core Data Research, incorporates a wide variety of factors essential for people to enjoy a healthy and secure retirement. Other European countries ranked closely behind Norway, with Switzerland taking second place with a score of 82 per cent, Iceland in third place with 81 per cent and Ireland took the fourth spot with a score of 80 per cent.

In addition, Luxembourg, the Netherlands, Australia, New Zealand, and Denmark all remain in the top 10 this year too, with rankings of fifth, sixth, seventh, eighth, and tenth, respectively. However, the Czech Republic dropped out of the top 10 as Germany moved in with a score of 76 per cent, replacing Denmark in ninth. The Czech Republic, which has the lowest unemployment in the European Union, is struggling to curb wage-driven inflation.

It was a positive year overall, as for the first time in a decade, nearly all developed countries in the index saw an improvement in their retirement security from the previous year. Improved economic conditions is the main contributing factor for this. Employment growth as economies rebounded after the pandemic, wage gains, and higher interest rates which have improved the funding ratios of many pension schemes. Only Portugal, Spain and Japan saw decreases.

The index rankings are relative, not absolute, and are based on an aggregate of mean scores from 0 per cent to 100 per cent for 18 performance measures in each of its four sub-indices – Finances in Retirement, Material Well-being, Health, and Quality of Life – which are combined to provide an overall picture of the environment for retirees.

Commenting on this year’s results, Natixis IM head of Northern Europe, Andrew Benton, said: “The common drivers of performance among the top 25 are higher interest rates, as well as improvements in employment levels, and environmental progress. As economies rebounded from the global pandemic, employment increased strongly, but so did inflation which forced central banks to hike rates to maintain stability.

“Progress on the environment has also played a crucial role in driving positive change in some countries, as they adopt sustainable practices and invest in clean energy initiatives, especially in the wake of the Russian invasion of Ukraine.”

However, despite an improving macro picture and overall increases in retirement security, additional research from Natixis Investment Managers’ reveals that optimism at the overall level is not being felt in the everyday lives of individuals, who remain concerned about retirement.

Natixis IM’s 2023 global individual investor survey of 8,550 people with at least USD 100,000 in investable assets found that while 56 per cent think they will have the freedom to do what they want when they want in retirement, 48 per cent worry ‘it will take a miracle’ for them to retire securely, 28 per cent believe they will have no choice but to live frugally, and 21 per cent think they will have to continue working.

“After a decade of low inflation and big, double-digit investment returns from equities, many individuals have had unrealistic expectations, but the past year has been a reality check. Saving alone won’t allow most people to reach their retirement goals, and so investing and working with a professional are important steps to achieving financial security in retirement. But even then, individuals need to set realistic goals and maximize the opportunities to save, no matter how far away retirement may seem,” Benton added.

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