Young workers are losing faith in the state pension. A stark new report from the International Longevity Centre warns that Generation Z are planning for retirement without it. The think tank’s analysis suggests that many under 30 believe the system will be broken by the time they retire. This is a profound shift in expectations. It reflects a deeper crisis in the social contract between the state and its youngest citizens.
The state pension is the bedrock of retirement income for millions. But for those now in their twenties, it feels like a distant promise. The report draws on surveys showing that a majority of 18 to 30 year olds expect the pension age to rise again. Many think the basic state pension will be means tested or even abolished. This is not idle speculation. The policy context is clear: the state pension age is already climbing to 67 and beyond. Life expectancy gains have stalled. The triple lock, which guarantees annual increases, costs billions. The government has repeatedly resisted calls to reform it. But the strain on public finances is immense.
For young workers, the response to this uncertainty is pragmatic. One in four Gen Z adults are now paying into a private pension. That is higher than previous generations at the same age. But here is the rub: those contributions are often tiny. Auto-enrolment minimums are just 8% of earnings. Many are in low paid work or the gig economy. The report warns that without a proper state pension, even these modest savings will leave people in poverty. A young person earning the median wage and saving the minimum will retire on an income far below what they need. The state pension currently provides £11,500 a year. Even a full private pension of £20,000 a year is modest. Without the state top up, the gap is brutal.
This is a regional crisis too. Young people in the North East and Wales are more likely to be in low paid work. They save less. They are more reliant on the state. The think tank calls for a new settlement. It proposes a higher state pension for those with lower earnings. It wants auto-enrolment contributions to rise to 12%. And it demands a formal review of the pension age by 2025. But the bigger question is one of trust. Can a generation that has seen housing become unaffordable, student debt soar, and wages stagnate believe that the state will look after them in old age? The evidence says no. They are voting with their feet. They are saving, but they are also lowering expectations. The danger is that this becomes a self fulfilling prophecy. If we accept that the state will not provide, then it won't. But that is a choice. The report is a warning to ministers: act now or accept a future where millions retire into hardship. The clock is ticking.
