EUROPE - Denmark tops Aon Consulting's new ‘European Pensions Barometer' - with accession countries Estonia and Latvia also making the top four.
Aon analysed data in four main areas for each of the EU countries: demographics, adequacy of the state pension, affordability and sustainability of the state pension and company pensions.
"Denmark is the best placed country among the 25 constituent members of the EU to provide its citizens with adequate pensions," Aon said. Estonia and Latvia relegated the Netherlands and the UK to fifth and sixth place respectively.
Portugal, the top ranked country in last year's inaugural Barometer, slipped to 13th place this year due to improvements in demography and private pension provision by other countries and the influx of new countries into the scope of the survey.
The UK pension system ranks sixth out of 25, despite the fact that the UK has the least generous state pension system in the EU.
This is because of relatively favourable demography, the historically strong private pensions system and the affordability of the state pension.
The firm's chief actuary Donald Duval said: "Although the UK is better placed than many other EU countries, the inadequacy of the State Pension is a persistent problem, and the decline in company pensions (caused by over-regulation) means that the UK ranking is likely to decline in future.
"An apparently surprising feature of the Barometer is the strong performance of some of the recently joined countries such as Estonia and Latvia.
"However, this is primarily due to the poor mortality and relatively late retirement experienced in these countries, which makes it possible to provide relatively generous state pensions at an affordable cost. As the mortality in these countries improves (which one would hope would be accelerated by their joining the EU) then pensions may become more of a problem in the future."
The full report will be available in early 2007.