A generation that has never known a stable housing market is now planning for a retirement without the state pension, according to a new survey that lays bare the chasm between young workers and the ageing systems meant to support them. The research, published by the Resolution Foundation, finds that fewer than one in five 18 to 27-year-olds expect the state pension to be available when they reach retirement age. The figure plunges to just 12 per cent among those earning below the median wage, exposing a crisis of faith in the welfare state among those who need it most.
The findings arrive against a backdrop of escalating costs for rent, food and childcare, while wages for many junior roles have barely budged in real terms. For young people in the industrial towns and cities of the North, where high-skilled jobs are scarce and the cost of living cuts deeper, the prospect of a retirement without a guaranteed state income forces a stark recalculation of life plans.
‘I’m already setting aside what I can into a workplace pension, but I have zero expectations that the state will be there for me,’ said Chloe, a 24-year-old teaching assistant from Bolton. ‘My parents tell me to save, but after rent and bills there’s nothing left. The reality is I’ll probably be working until I drop. Most of my friends feel the same way.’
Her sentiment is widely echoed. The survey, which polled 2,000 adults under 30, reveals that more than a third have already taken steps to boost their private pension savings, while a quarter are investing in property or stocks with the explicit aim of funding a retirement the state will not cover. Yet the gap between aspiration and ability is vast: the average Gen Z worker has saved just £3,000 into a private pension, while the cost of a basic retirement is estimated at over £220,000.
Economists warn that the collapse in trust is rational. The state pension age is expected to rise to 68 by 2039, with calls from some think tanks to push it to 70 or 71. Meanwhile, the triple lock that guarantees annual increases is under review, and the 2024 Budget saw the Chancellor pause any expansion of automatic enrolment into workplace pensions. For young people watching the value of their contributions erode against inflation, the message is clear: you are on your own.
‘This is a dangerous spiral,’ said Rachel Jones, a pensions researcher at the University of Manchester. ‘If young people stop believing the state pension will exist, they will either not pay in, or they will try to opt out of the system altogether. That undermines the entire social contract and leaves the most vulnerable without a safety net. We need a cross-party consensus on retirement that gives this generation a credible promise.’
The crisis is acutely regional. In the South East, where graduate salaries are higher and property ownership is within reach of the well-off, young workers can cobble together alternative plans. But in the North East and North West, where median wages lag by up to £8,000 a year and home ownership rates for under-30s have fallen by a third since the 1990s, the notion of saving enough to retire is a fantasy.
Unions see the issue as a new front in the fight for fair pay. ‘The only way young people can plan for the future is if we rebuild the collective provision,’ said Bethan Moore, a union organiser in Sheffield. ‘That means proper wages now, a housing market that doesn’t steal your savings and a state pension that is protected and expanded. Anything less is a betrayal of the next generation.’
The government insists the state pension is ‘here to stay’ and points to the triple lock as proof of commitment. But for the young workers of Bolton and beyond, the numbers do not add up. At 24, Chloe has already concluded: ‘I don’t believe them. I have to assume I’ll get nothing. And even then, I’m not sure I can save enough.’
As the fiscal forecasts darken and the demographic squeeze tightens, the question is no longer whether Gen Z will receive a state pension. It is whether abandoning that hope will push them further from the security their parents took for granted. For a generation that has already lost the housing ladder, the prospect of never retiring is a wound that keeps on opening.
