People in the UK are not saving enough for retirement and are helping create an unsustainable pension system, latest research warns.

According to the Melbourne Mercer Global Pensions Index, the UK was rated the 14th best place for pensions in the world, scoring highly on integrity but poorly on adequacy and lagging well behind top-ranked Holland.

Benoit Hudon, head of wealth at Mercer UK, commented: “A lack of understanding of what they will receive and of what they will actually need in retirement has led to a gap in retirement savings for many employees. This begs the question as to whether employers should play a greater role, both in educating and supporting their workforce.”

The research compared 37 retirement systems worldwide for adequacy, sustainability and integrity, the FT Adviser website reports.

Release of the Mercer data coincides with the launch of an entirely digital pension scheme aimed at the UK’s self-employed workers.

New provider Penfold, which has introduced the scheme, says people can activate their account in “five minutes” and can then make use of a dashboard that shows how much they have saved and their ultimate target.

Penfold co-founder Steve Hykin said: “We’re aiming to make pensions not just easier, but more attractive for self-employed people to start planning for later in life. Often people put off setting up a pension due to the amount of understanding needed, the volume of paperwork and even just the fact that it can involve calling multiple providers to find the best option.

“Our research has shown the scheme needed to be flexible and adapt to the end-user, not the other way round.”