State pensioners could be given £600 extra as UK 'matches' Luxembourg and Spain

State pensioners could land £600 if the UK government decides to "align" payouts with those of European Union countries. State pensioners could wake up to £600 extra - every single month - if the UK uprates payments to match top-paying parts of the continent.

Daniel Abbot, independent financial advisor and chartered accountant at Hoxton Capital Management, told the Daily Express : "In terms of economic stability and standard of living, I would compare the UK most closely to France.

"As such, to be comparable with the French state pension, the UK would need to increase its by around £600 per month (63 per cent)." He explained: "That is quite a large hit to take in one go for budgetary purposes though so it would be very unlikely.

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"After that, annual increases in line with inflation would see the state pension as a percentage of the cost of living remain consistent." Mr Abbott said: "The state pension is primarily funded by National Insurance contributions from the current year, which are directly linked to earnings.

"Therefore, when the highest of the three measures (2.5 per cent, wage growth, or inflation) is not wage growth, the amount paid out increases at a higher rate than the amount collected.

"Despite this, when compared to other European countries, the UK state pension is relatively low as a percentage of the average cost of living. The UK is currently ranked outside the top 10 countries, which include Luxembourg, Spain, and Belgium."

Luxembourg tops the European Pension Breakeven Index. The Luxembourg pension system pays out an average of €6,095.87 (£5,211.20) and thanks to the relatively low cost of living in comparison, pensioners can expect a comfortable retirement with a pension income at 538.47% over the breakeven point.

Spain came in second place, with the country’s pension system paying out a maximum of €3,175.00 ( £2,714.23) per month.