Retirement realities: Understanding the impact of the cost-of-living on pension savings and retirement expectations

Many people in the UK are experiencing poverty once they retire from work, and many more may be at risk of post-work poverty in the future if their pension contributions are not sufficiently high to ensure a decent standard of living in retirement. This “post-work poverty” is a particular risk for those in low paid jobs.  

In 2023 and 2024 the Living Wage Foundation commissioned polling of 3,000 UK adults to help us better understand the pensions landscape in the UK, how it is changing over time, how it may change in the future, and how people feel about their pension contributions. Our findings suggest that most people working in the UK today are concerned about their finances in retirement and don’t expect to be able to stop working at retirement age. Despite the cost-of-living crisis showing signs of easing, many have had to decrease or stop their pension contributions to get by. These results highlight the importance of ensuring that minimum pension contributions are at a level likely to deliver an acceptable standard of living in retirement. 

Key findings: 

• In 2024, 62% of UK adults who paid into a workplace or personal pension scheme in the previous 12 months feel they will need to work past retirement age and over 50% feel they will never be able to retire. These beliefs were more common among female workers, those aged 55 and under, tenants and those earning below the real Living Wage. 
• 70% said they need to do more planning for retirement, rising to 74% among those earning below the real Living Wage.  
• 65% of those earning less than the real Living Wage did not know whether they were saving enough for retirement and over half of these workers did not feel they were saving enough to meet their basic needs in retirement. 
• 9% of UK adults decreased or stopped their personal pension contributions in the previous six months. This increased to 17% among those earning below the real Living Wage.  
• The main reason people cited for decreasing or stopping their contributions was the cost-of-living.  
• Looking ahead, 6% of UK adults expect their personal pension contributions to decrease or stop in the next six months.