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Why Gen Z are planning for life without a state pension

Nairavoice · Jun 30, 2026 · 10 min read

Joel has finally landed his first graduate engineering job after several years of lower‑paid roles. He’s in his early 20s, lives with his parents and works in London. But instead of splashing the extra cash, or saving up for holidays or a house deposit, he’s decided to squirrel more of it away into his workplace pension.

The reason? He doesn’t think he’ll get any kind of state pension. Like Joel, around half of Gen Z (those born from 1997–2012) say they don’t expect the state pension to exist by the time they retire. It’s pretty stark to hear, but growing up with constant headlines about an ageing population, a proportionally smaller working-age population, and the pressure that government finances are under, Joel thinks it’s his generation that will suffer.

“I don’t believe that I’ll be a recipient of a state pension. I know a lot of people my age don’t think they’re going to be… There just won’t be enough money,” he says.

Retirement has always felt distant when you’re in your 20s – something to think about later. But what’s emerging among today’s under‑30s is something different: not just distance, but doubt.

“It just mathematically doesn’t make sense… There has to get to a point where that state pension is taking up too much of the budget and can’t exist in the way that it exists right now,” Joel says.

“I don’t believe that I’ll be a recipient of a state pension,” says Joel

The state pension age is shifting. At the start of April, the age at which you receive it began to gradually creep up, rising from 66 years to 67 years by March 2028. It’s due to go up again in 20 years’ time to 68, though that might happen earlier as the government has an ongoing independent review.

That’s a frustration for 27-year-old retail manager Connor, who got in touch via BBC Your Voice, because he says “the goalpost keeps moving”. “At the minute I’ll be 68 by the time I can retire, but I do think I’ll be probably closer to 75, if I’m honest.”

More than 13 million people – 19% of the population – are currently of state pension age. By 2050, even with the state pension age rising to 68, that group is projected to exceed 15 million people, nearly a quarter of the population, with numbers projected to climb towards 17 million by the 2070s. In other words, there will be lots more people qualifying for the state pension, and fewer working people, as a proportion, paying taxes into the pot to cover the bill.

At the same time, almost half of working‑age adults are not paying into a private pension pot. That means many will be relying solely on the state pension for their retirement income – and with relative poverty rates among pensioners now at 14%, we can already see how difficult that can be.

Experts warn that if a whole generation stops believing the state pension will be there, it could push people towards more risky investments, prompt overly restrictive behaviour, or lead others not to save at all.

So, are we heading towards a major pension crisis for many in Gen Z? And if we are, might the Gen Z generation end up redefining what retirement looks like?

For those hitting the state pension milestone today, as long as they’ve made 35 years of National Insurance contributions, they’re entitled to £241.30 a week.

That amount rises each year to help people keep pace with rising living costs. Since 2011, pension increases have been guaranteed by the triple lock – which means the rise will either match the rate of inflation, average earnings or 2.5% – whichever is higher.

But in recent weeks, several organisations have called for the rules to be rewritten.

The centre-left Resolution Foundation think tank has argued for scrapping the triple lock, saying that continuing to prioritise the incomes of pensioners over working-age adults and children would be unfair.

Meanwhile, the Tony Blair Institute (TBI), a think tank set up by the former prime minister, takes things a step further and has called for the whole state pension to be scrapped and replaced with a new “Lifespan Fund”. Thomas Smith, director of economic policy at the TBI, argued: “Britain’s state pension system was built for a different era. We can’t keep pouring money into a system that is increasingly unaffordable.”

It suggests scrapping the triple lock and allowing people to access some of their state pension early if they need it because of redundancy and frequent job changes.

That’s an idea that might appeal to Connor in Chesterfield. He’s facing redundancy from his job at a global cosmetics firm, and the ability to draw down a small amount – effectively a withdrawal from his future state pension – might tide him through.

“There’s not that many jobs out there at the minute, unfortunately. I still live at home with my parents luckily, but I pay board to them. I still have a car payment, I still have my insurance to pay.”

“There’s not that many jobs out there,” says Connor

But former pensions minister Steve Webb argues those changes would be “a huge backward step”. He says the benefit of the current system is its simplicity which shouldn’t be replaced with “something fiendishly complex and highly intrusive, which would take many decades to implement in full.”

The government says it has committed to the triple lock for the rest of this parliament, and that the Pensions Commission, an independent body set up to review the regime for UK private pensions, is examining “how we can ensure secure retirements for tomorrow’s pensioners”.

It’s likely that those in their 20s will not have a triple‑locked pension. That means living on the state pension alone will become more difficult, as its value may rise more slowly than the cost of food, travel, clothing and household bills.

For those who doubt the triple lock will endure, the debate often shifts to how the state pension can be sustained at all. One idea that regularly surfaces is means‑testing. In some ways it already is: very low‑income pensioners can receive an additional benefit called Pension Credit. But 24‑year‑old Joel believes that for the state pension to survive, the choices may need to be more radical.

“I don’t think a means-tested state pension is necessarily a bad thing. But it would be a bad thing if it only applies to people in 50 years and not now when we should be saving some of that money.”

Engineer Joel is one of life’s squirrels. His fear about the future of the state pension means he’s doubling-down on his private pension. He contacted BBC Your Voice because he feels that consecutive governments have sheltered current pensioners, leaving the consequences for his generation to face.

“I’m going to have to increase the amount of my paycheck that goes into a private pension, which obviously isn’t good with cost of living through the roof,” he says.

The scale of what younger workers may need to save adds to that anxiety for some. Investment company Rathbones estimates that a single person retiring today at 65 (with the state pension) may need around £796,000 in savings to fund a “comfortable retirement”. If the state pension remains, a 25‑year‑old today would need a pot of around £1.68m to retire comfortably as a single person. Without the state pension, the figure for Gen Z jumps to more than £2.4m.

Against this backdrop, Joel says many of his friends are considering opting out of private and workplace pensions altogether and investing independently instead, mostly in “crypto or index funds and things like that.

“There’s a sense, whether it’s right or wrong, that that’s more secure than putting it in a pension where they’re also going to take a chip on top.”

It’s possible that individual investment choices could earn more than a pension scheme, but it’s a big gamble.

Behavioural economics suggests that when people lose trust in a system, they tend to either opt out entirely or over‑compensate. Both can be problematic. Saving extra in a private pension may limit current life options, but opting out can leave many with riskier retirement savings, or indeed none at all.

In central Manchester, 23‑year‑old Ashleigh agrees with Joel that the state pension is unlikely to be coming her way: “At this rate I don’t think anyone’s ever going to retire, I think everyone will just have to fend for themselves in the end.”

But as someone on a lower income, her pension choices are less squirrel‑like. When working for a big retailer, she says that she chose to stop contributing to her employer’s auto-enrolment pension.

“I opted out of it. I need the money now.” She explains: “I’d rather save for a house and then at least I have something to show for it”.

Some experts warn that the gap between rich and poor in retirement could widen significantly for this generation.

Dr Suzy Morrissey, deputy director at the Pensions Policy Institute (PPI), believes that alongside how much Gen Z save privately, another factor will widen the divide: far more of them will be renting.

“Renting in retirement increases your chances of pensioner poverty, and they do face challenges to save, as younger people, that previous generations didn’t face when they were at the same age,” she says. “If we have people paying rent in retirement who don’t have large pension pots to cover those expenses, then that equals higher risk of pensioner poverty.”

But Morrissey sees a silver lining: pensions auto-enrollment, the system that automatically puts most employees into a workplace pension unless they opt out. If they’ve been employees, “they will have spent their working life contributing into a pension pot, and they will be the first generation that will have spent their whole life doing that.”

It’ll be a backstop for many, but the minimum contribution rate is unlikely to be enough for a comfortable retirement. It’s not automatic for the self-employed and people like Ashleigh have opted out because of immediate financial pressures, so it looks like plenty won’t see the benefit of that silver lining.

For some, the response to an uncertain future is to focus on the present.

Lauren, from Hull, says: “Money always comes back, time doesn’t. The world is so vast, we shouldn’t wait till the last 10/20 years of our lives to go out and see it!”

At 24, she’s about to take six months off from her job as a business coordinator. She’s one of a growing number planning to take regular career breaks, or “grown-up gap years”, which many are terming “mini retirement”. HSBC’s 2025 UK survey found that 63% of Gen Z plan to take at least one mini‑retirement, compared with 32% of Gen X and 13% of Boomers.

“The majority of my friends don’t pay into pensions and instead decide to take their whole wage [after taxes] and spend it how they see fit. A large proportion goes on travels or holidays,” says Lauren.

“I currently don’t pay into a pension, actually I never have. I’d way rather have my money now and use it to live life,” she says.

“The majority of my friends don’t pay into pensions,” says Lauren

But there’s a warning for Gen Z from the experience of the Waspi women – hundreds of thousands born in the 1950s who campaigners say have suffered because of poorly communicated rises in the state pension age. Their financial shock shows that costs may only become clear when it’s too late to course-correct.

If Gen Z’s suspicions are right, and the state pension becomes a less dependable part of income in later life, then more will have to take a totally different approach to retirement, savings and life choices to navigate the new landscape.

Additional reporting: Kris Bramwell and Harriet Whitehead

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