Approximately 10 million Generation X adults fear that they won’t be able to save enough to live comfortably during retirement – significantly less than any other generation, according to findings from new research.
Just 28 per cent of the 14 million adults born between 1965 and 1981 are confident about the state of their pension and life savings, according to a new poll by the Get Britain Pension Ready campaign.
Generations above and below this cohort, however, are far more optimistic. Around half of Gen Z – those born after 1996 – and Millennials – those born between 1981 and 1996 – state they feel they are on track for a comfortable retirement.
The survey also found that baby boomers, many of whom have already reached state pension age as they were born between 1946 and 1964, are also more optimistic, with 37 per cent stating they were on track to reach their saving goal.
The statistics highlight the scale of the challenge facing the UK as population bulges and longer life expectancies mean the number of people living long into retirement is rising.
According to figures from the Office for National Statistics (ONS), there were 12.7 million people aged over 65 in the UK in 2022 making up 19 per cent of the population, but this is projected to rise to 22.1 million and 27 per cent of the population by 2072.
The Get Britain Pension Ready poll also found that around one in six Gen X adults fear that they may never be able to retire, with the high cost of living and an insufficient state pension cited as the two most common reasons.
The survey, commissioned by Annuity Ready, highlighted the dual challenges faced by the 1965 to 1981 cohort. Many missed out on defined benefit (DB) pension schemes and benefited from auto-enrollment too late in their careers.
DB pensions, which most companies have largely phased out, offer employees a fixed sum of money when they retire based on their years of service and final salary. Around 65 per cent of the Gen X adults surveyed said these types of schemes were no longer an option for them, despite nearly half stating they were when they entered the workforce.
Auto-enrollment for workplace pensions was introduced in the UK in 2012, ensuring millions of adults can start building a pension pot for retirement through defined contribution (DC) schemes, where both the employee and employer contribute a set amount each year.
The survey found, however, that the average number of years that Gen X adults worked since this scheme was introduced was just 15 years, meaning many were unable to benefit enough to ensure a comfortable retirement.
Find lost pensions
An estimated £31.1bn is believed to be lying in around 3.29 million unclaimed, inactive or lost pension pots, the Pensions Policy Institute (PPI), an independent research group, found.
Even if you think you have a small amount hiding away, it is checking as every bit will count.
See if you have paperwork about your pension with old employers. If you can’t find this, contact the government’s Pension Tracing Helpline. You will need either the name of your employer or the pension provider.
The service can’t tell you if you have a pension with them but they can give you contact details so you can go and check.
Make the most of your state pension
If you have gaps in your national insurance record, now may be the time to put a plan in place to fill them. If you qualified for a benefit that comes with a free national insurance credit during a period when you had a gap, you may be able to backdate a claim and receive the credit.
Otherwise, you can pay for voluntary credits. You can usually go back six tax years, but if you are a man born after 5 April, 1951 or a woman born after 5 April 1953, then you have the opportunity to go back and fill gaps from 2006.
However, you must do this by April 2025. Check with the Future Pension Centre before handing over any money, though, to ensure that you will really benefit from the extra credits.
Consolidate your pensions
Pension consolidation is combining or transferring pension pots by bringing them together under one roof.
Holding your pensions in one place can give you a clear, overarching view of what you have and can really improve your retirement decision-making.
However, before you take the plunge, be sure to check that you aren’t missing out on any benefits, such as guaranteed annuity rates or incurring expensive exit fees.
Check your contributions
Keep an eye on how much you have saved and how much you are contributing. If you can, see if you can increase them.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Even small increases can make a huge difference. It’s also worth seeing if your employer is willing to boost their contribution if you increase yours. It’s what is known as an employer match and can be a relatively painless way of getting a lot more into your pension.”
Top up your savings
If you’ve spent years out of the workplace, perhaps to look after children, you might feel your current savings are a bit light.
Camila Esmund, senior manager at Interactive Investor, said: “To make up for lost time, consider topping up your savings, which you can do by putting more each month into your workplace scheme or setting up a separate personal pension.”
Even doing so by one or two per cent can grow your pot over time due to the power of compound interest.
Delay accessing your state pension
If you are at, or near, the state pension age (currently 66, rising to 67 by 2028) and don’t need it immediately, you could consider delaying.
Your state pension increases by 1 per cent every nine weeks you delay, equating to nearly 5.8 per cent annually.
Check how your pension is invested
Holly Tomlinson, financial planner at Quilter, said: “Many people will have pension pots that are saving into the default fund, but such funds are unlikely to achieve you the best possible returns.
“Checking how your pension is invested can be very beneficial as performance can vary considerably across different investments.”
Pensions tend to have a long investment timeline, and making even a small change to how your money is invested now could significantly increase the size of your pension pot in the long run. So, you should make sure your money is in the right fund for your goals and circumstances.
If needed, it is advised that you speak to a professional financial adviser, who can help ensure that you are making the most appropriate decisions tailored to your retirement plans.
With millions of UK adults facing challenges in retirement, here are some options the Government could explore to ensure more people are confident in their pension:
One factor that could affect many approaching retirement is the issue of lost pension pots. A 2024 report by the Pension Policy Institute estimated that almost 3.3 million pension pots, containing an average sum of £9,470, are currently unclaimed.
To help combat this, the Government has been planning since 2016 to launch a pensions dashboard designed to help people track their retirement savings in one place.
This scheme, however, has faced frequent delays, and some industry leaders are concerned it won’t be delivered on time. No launch date has been confirmed, but the dashboard is expected to be available to the public by 2026.
Sir Steve Webb, a former pensions minister, now a partner at the pensions consultancy LCP, has urged the Government to deliver the dashboard as soon as possible to help millions plan for retirement.
“If you want something that is 99.99 per cent perfect, there’s not a cat in hell’s chance because the underlying data isn’t there. If you want something that will help a lot of people find lost money, then it is perfectly possible,” he told The i Paper.
There have been reports that Chancellor Rachel Reeves is considering cutting the cash Isa tax-free limit to just £4,000 a year following a meeting in Downing Street with investment fund managers.
Some in the sector have argued that the £20,000 tax-free limit on cash Isas is disincentivising people from saving in stocks and shares Isas, which support British growth.
Shaun Moore, a tax and financial planning expert at Quilter, said the change “could encourage more people to invest, which has historically delivered better long-term returns and supports economic growth”.
This change could have some benefits for saves approaching retirement who currently have their savings in cash Isas. Concerns, however, have been raised that the proposal could have the opposite effect on those over retirement age.
Analysis by wealth management firm Quilter, published by The Telegraph, suggests that abolishing cash Isas could leave a basic-rate taxpayer with a cash Isa pot of £42,243 – the average for an over-65 saver – with an additional £2,080 in income tax over the next five tax years.
In 2023, a private member’s bill was passed into law, giving the Government the power to lower the age at which auto-enrolment into workplace pensions begins from 22 to 18. The act also has provisions allowing ministers to lower the qualifying earnings threshold, which is currently £10,000 a year.
It was spearheaded by Conservative MP Jonathan Gullis, who said that would “benefit scores of young people in all four corners of the country”, adding: “With all the evidence of the huge positive impact it can have, it is a no-brainer that we now need to extend auto-enrolment to those aged 18 and above.”
Despite receiving Royal Assent in September 2023, neither the previous Conservative government nor the current Labour administration have used these powers to lower the thresholds, and a promised consultation on the changes never materialised.
Labour announced in January 2025 that it would be freezing the salary threshold at £10,000 until mid-2026.
Although this change would not impact Gen X savers, it could help future generations get a head start on saving for retirement.
In August 2024, reports surfaced that the Chancellor was considering increasing the minimum level for employer pension contributions to emulate the Australian system.
Employers in Australia must currently contribute 11.5 per cent of employees’ salaries to their pension, and this is set to rise to 12 per cent in 2025. This is much higher than in the UK, where the total minimum contribution in the UK is 8 per cent, comprising a 5 per cent employee contribution and a 3 per cent employer top-up.
No such change has been announced, however, with concern about the impact on businesses likely a contributing factor.
Mike Ambery, retirement savings director at Standard Life, told The Telegraph at the time that there were “huge potential benefits to auto-enrolment minimum contributions rising” but warned that “there would need to be a strong framework in place for gradually increasing employer contributions” to prevent excess impact on businesses.
Increasing employer contributions gradually could help millions of savers boost their pension pots, particularly those in the Gen X cohort who are approaching retirement.
In 2022, MPs on the Work and Pensions Committee urged the then-Conservative government to scrap the annual pension advice allowance (PAA) limit, arguing that it discourages people from seeking regulated financial advice.
The PAA allows those approaching retirement to withdraw up to £500 tax-free a year from their pension up to three times in their lifetime to pay for regulated financial advice, giving them a total of £1,500 towards financial planning.
However, the committee’s report found that this service was underused and poorly signposted and that the £500 annual limit was not enough to ensure people could get good financial advice.
“Either because of a lack of awareness or lack of demand, the policy is not working. Its design has made it unusable by most savers. We believe that the broad aim of the policy is correct, but it has been poorly executed,” it stated.
In addition to removing the annual cap, the committee recommended uprating the overall limit in line with inflation, encouraging the Government’s Money and Pensions Service (MaPS) to signpost the allowance, and setting out guidance to ensure it’s only used by those who would benefit from it.
In the three years since the report was published, these recommendations have not been implemented.
The Government’s MoneyHelper service currently offers free Pension Wise to anyone over 50 who has a defined contribution pension, which gives them advice on planning for retirement.
In its 2022 report, the Work and Pensions Committee found that this was a “well-regarded but under-utilised service” and urged the Government to boost its usage, as a user valuation in 2020 found that 88 per cent of those who used the service felt it improved their understanding of their pension options.
Since 2022, pension providers have been required to recommend that people access financial advice, including the Pension Wise service, before accessing their pension, and many providers currently recommend the service to their customers.
To improve the uptake of the service, the committee recommended launching a trial of automatic appointments being offered to people when they turn 50 or when they access their pension for the first time.
The MaPS service and pensions ministers said at the time they were open to the trial, but no such trial has been launched in line with the report’s recommendations.
According to the Pensions and Lifetime Savings Association (PLSA), the typical income needed for a minimum retirement is £14,400 for a single person and £22,400 for a couple. For a couple, this includes around £95 a week on groceries, no car and a week-long UK holiday.
Meanwhile, a moderate retirement is £31,300 for a single person and £43,100 for a couple. This includes spending around £100 a week on groceries, the occasional meal out, and a two-week foreign holiday each year.
For a comfortable retirement, you’ll need £43,100 per year as a single person and £59,000 as a couple. For both, this includes a three-year-old small car, an annual four-star fortnight away in the Mediterranean and up to £1,500 for clothing and footwear a year.
However, if you want to live a more lavish retirement, your pension savings will need to provide a much higher income.
These figures also do not include housing costs, which you will have to factor into your budget if you still have a mortgage or plan to rent when you enter retirement.
Be aware, as well, that if you do retire early, you will not be able to rely on the state pension income – which is currently £221.20 a week – until you reach state pension age.
As it stands, the age at which you start to collect your state pension is 66, but this will rise to 67 between 2026 and 2028. So, if you decide to retire at 60, you will need to be able to fund your lifestyle without depending on the state pension for the first six years.
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