A generational divide over retirement planning has prompted calls for the Chancellor to revive National Savings bonds, as new data suggests a majority of Britons under 30 no longer expect to receive the state pension. The shift, documented by the Resolution Foundation, indicates that younger workers are increasingly sceptical of the system's long-term viability, with 62 per cent of 18- to 30-year-olds expressing doubt that the pension will exist when they retire.
The Resolution Foundation's analysis, published on Tuesday, shows that this attrition of trust has accelerated since the 2022 cost of living crisis. Among those aged 30 to 45, 48 per cent harbour similar doubts. The figures mark a stark departure from the confidence levels recorded a decade ago, when fewer than a third of young people questioned the state pension's future.
In response, campaign groups and cross-party MPs are urging the Treasury to reintroduce National Savings income bonds, which were withdrawn from sale in 2011. These bonds, historically seen as a low-risk savings vehicle for small investors, could offer a state-backed alternative to private pensions. The Treasury has not commented on the proposal, but the Chancellor is understood to be reviewing options to shore up long-term savings participation.
The Pension Policy Institute, a non-partisan research body, calculates that the current state pension age of 66 costs the Exchequer approximately £110 billion annually. Without reform, the institute projects this figure will rise to £160 billion by 2040 as the population ages. Yet the Resolution Foundation's director, Torsten Bell, argued that simply adjusting the pension age would not rebuild public confidence. More fundamental changes to the system's architecture were needed.
One such change could involve a return to the National Savings model, which once offered index-linked bonds that guaranteed a real rate of return. These instruments were phased out as successive Chancellors sought to reduce the national debt. However, the Office for Budget Responsibility has noted that the cost of servicing index-linked gilts has risen sharply since 2021, making such products potentially expensive for the government to underwrite.
Analysis by the Institute for Fiscal Studies suggests that a new National Savings bond targeting younger savers could channel up to £40 billion into the national savings pool over five years, reducing reliance on international bond markets. The scheme would require explicit government guarantees, but proponents argue that the social benefit of restoring faith in retirement planning outweighs the fiscal risk.
Critics, including some within the Conservative Party, caution that any new bond must be structured to avoid crowding out private sector pension provision. The Treasury has resisted previous calls for a return to National Savings products, citing the complexity of managing retail investors. Yet with inflation eroding savings and young people turning to alternative assets such as cryptocurrency, the political pressure to act appears to be mounting.
The debate comes as the Chancellor prepares for the Autumn Statement, where pension reforms are expected to feature prominently. The Resolution Foundation's report, titled "Missing Generation: The Case for Rebuilding Retirement Confidence", recommends a package of measures including automatic enrolment reforms and a new public savings vehicle. Whether the Treasury will heed the call remains uncertain, but the data suggests that without intervention, a generation may simply be planning to work indefinitely.
