Finland has retained its position as the world’s happiest country for an eighth year running, with the country’s comprehensive welfare system having a strong sway on the outcome, according to analysts.

The UN-sponsored World Happiness Report saw Costa Rica and Mexico enter the top 10 for the first time. The UK slipped to 23rd in the list while the US fell a place to 24th – its lowest ever position.

Finnish CEO of customer feedback company HappyOrNot Miika Mäkitalo, said workplace culture played a massive part in happiness for societies.

He said: “In Finland, we believe in offering practical solutions that enable employees to manage their professional and personal lives. For instance, the Working Hours Act allows employees to adjust their working hours by up to three hours and promotes remote working, giving individuals greater control over their schedules.

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“This flexibility not only improves work-life balance but also enhances productivity. Similarly, Finland’s generous parental leave policies, which provide nearly equal paid leave for both parents, allow families to focus on what matters most without sacrificing career progression.”

Trust and autonomy were fundamental to maintaining a happy workforce, said Mäkitalo: “When employees are trusted to take ownership of their work, they perform at a higher level and are more engaged. Providing this freedom, coupled with a supportive environment, creates a sense of responsibility and loyalty.”

The study found strangers were about twice as kind as people had imagined. It measured trust in strangers by deliberately losing wallets, seeing how many were returned and comparing that with how many people thought would be handed in.

The rate of wallets returned was almost twice as high as people predicted.

The study, which gathered evidence from around the world, found belief in the kindness of others was more closely tied to happiness than previously thought.

John F Helliwell, an economist at the University of British Columbia and a founding editor of the report, said the wallet experiment data showed “people are much happier living where they think people care about each other”.

The top 10 was:

Finland

Denmark

Iceland

Sweden

Netherlands

Costa Rica

Norway

Israel

Luxembourg

Mexico.

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