Are young people’s expectations realistic?
Recent research highlights a notable generational gap in retirement expectations, with over one in five young people believing they will need an annual income of more than £100,000 for a comfortable retirement[1]. This figure, reported by 22% of those aged 18 to 34, sharply contrasts with the industry body Pensions UK’s Retirement Living Standards estimates that a single individual needs £43,900 to maintain a comfortable standard of living, excluding housing costs and Income Tax.
The data shows a significant gap
between the ambitions of younger generations and the outlook of those nearing retirement. Only 3% of people aged 50 to 69 expect to need the same six-figure sum for a comfortable standard of living. This divergence in expectations comes amid ongoing speculation about potential tax reforms that could substantially alter the landscape for long-term savers, adding another layer of complexity to financial planning.
Generation shaped by uncertainty
The high-earning ambitions of younger adults may be shaped by their direct experiences with significant economic pressures. Having navigated multiple economic downturns and periods of high inflation, many naturally worry about their future quality of life. This generation anticipates a more financially challenging retirement, mainly due to a surge in housing costs that earlier generations did not face to the same extent.
This concern is clear in their housing outlook. Nearly half (48%) of adults aged 18 to 34 expect to still be paying mortgage or rent in retirement. This is a significant increase from one in three (33%) of those aged 50 to 69 who anticipate the same. Making the situation more complex, younger people plan to retire earlier, aiming to do so at 59. This goal to leave the workforce sooner further hampers their ability to save enough for retirement.
The guidance gap
Despite these concerns, a surprising number of people are not seeking professional help. Research shows that over a quarter (26%) of individuals feel anxious about their retirement funds after checking their pension balance, while 15% believe it is either too early or too late to make any meaningful changes. However, over half (52%) of employees with a workplace pension have never sought professional guidance or advice.
This troubling reluctance to seek advice could significantly hinder achieving a comfortable retirement. It is evident that many younger adults are uncertain whether the State Pension and their personal savings will be sufficient. Removing barriers to accessing financial guidance, particularly regarding cost and trust, is crucial to help bridge this generational gap and enable individuals to plan effectively for their future.
Persistent gender divide
Across all age groups, the research also uncovers a notable gender gap in anticipated retirement income. Men consistently expect to need more than women to live comfortably. Among younger adults aged 18 to 34, men anticipate requiring around £81,300 annually, while women in the same age group expect to need approximately £69,000.
This gap remains across all age groups, with men nearing retirement (50 to 69) expecting to need £38,900, compared to £31,800 for women. Lower income expectations among women may be linked to concerns about pension adequacy, often driven by earnings gaps during their careers and time taken out of work for caring responsibilities. Whether due to these factors or others, this gap highlights the urgent need to tackle the specific challenges women encounter when planning their financial futures.
Source data:
[1] Royal London’s workplace pensions research was conducted between 4–14 July 2025, with a sample of 4,000 UK workers with a pension, of whom 3,404 had a workplace pension.
This article is for information purposes only and does not constitute tax, legal or financial advice. Tax treatment depends on individual circumstances and may change in the future. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available. Investments can fall as well as rise in value, and you may get back less than you invest.
