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15.3 million people at risk of retirement poverty

11 June 2025
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New research has highlighted the groups on track for a retirement of scrimping.

Several investment institutions publish annual reports on the state of the retirement market. The latest, from Scottish Widows, does not paint a rosy picture. Its National Retirement Forecast (NRF), conducted in conjunction with a leading economic forecaster, found that:

  • 39% of people aged between 22 and 65 are on track for a less-than-minimum lifestyle in retirement. In monetary terms, that equates to a net income of under £14,800 for a single person and below £23,100 for a couple. The corresponding income targets for a moderately comfortable retirement are £32,200 and £44,400.
  • 27% are concerned they will have to work longer than they would like to ensure they have sufficient retirement savings, and 15% do not ever expect to be able to retire.
  • Of those saving at the minimum automatic enrolment contribution level:
    • 48% are heading for a minimum retirement lifestyle,
    • 35% are at risk of being unable to cover their basic needs in retirement.

The research highlights three groups with the worst retirement prospects:

  1. Generation Z (those born between 1996 and 2010): Competing financial goals make retirement savings a challenge for Gen Z. The research found 25% of people in their 20s prioritise saving for emergency expenses, while 13% are unable to save at all. The NRF projections showed that more than four in 10 people in their 20s are at risk of poverty in retirement, while almost a quarter would only be able to afford a minimum retirement lifestyle.
  2. Squeezed low to middle earners: This group has been left vulnerable by the minimum automatic contribution level. Those in their 30s on an income between £20,000 and £35,000 are the most likely to contribute at the minimum.
  3. The self-employed: The UK’s 4.4 million self-employed workers have always been excluded from automatic enrolment, and it shows. 51% are at risk of not being able to cover their basic needs in retirement with another 25% on track for a minimum retirement lifestyle. 23% are not saving anything at all, effectively relying on the State pension alone.

If you are in one of those three vulnerable groups, all is not lost. Larger contributions late on can fill the gap. But the longer you leave it, the larger they will have to be.

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.

Tax treatment varies according to individual circumstances and is subject to change.

Content correct at time of writing.

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