The Treasury has been privately warned that an entire generation is writing off the state pension, with internal documents seen by this newsroom revealing that fewer than one in three Gen Z workers expect to rely on the state for retirement. The figures, buried in a leaked Home Office briefing prepared for the Chancellor, show that among 18 to 25 year olds, trust in the pension system has collapsed to record lows. Sources close to the department confirm that officials are now modelling scenarios where mass opt-out from auto-enrolment and private savings leaves millions facing poverty in old age.
The documents, marked ‘Sensitive: Not for Public Release’, cite polling from the Office for National Statistics indicating that 62% of Gen Z believe they will never see a state pension payout. The same cohort is overwhelmingly sceptical of private pension schemes, with 71% saying they would rather invest in property or crypto than contribute to a workplace plan. One official quoted in the briefing calls this a ‘perfect storm’ of distrust and disengagement.
I have spoken to three current and former Treasury analysts who confirm that the department is running stress tests based on a 40% drop in private pension uptake by 2030. The warnings are dire. Without drastic intervention, they say, the tax burden on future working generations could spiral to support those who did not save enough. One senior economist described the situation as ‘a scandal in slow motion’.
The irony is that the state pension has itself become a political football. The Chancellor’s recent moves to scrap the triple lock and pause auto-enrolment increases have done nothing to restore faith. Meanwhile, the National Insurance rise last year has hit younger workers hardest, making them less likely to want to lock in more of their income for decades ahead. The briefing includes a frank admission: ‘We cannot expect this cohort to trust a system that keeps moving the goalposts.’
But the story goes deeper than simple trust. My sources have provided evidence of targeted disinformation campaigns on social media encouraging young people to cash out their pensions early. At least three unregulated financial influencers with combined reach of four million followers have been promoting early withdrawal. The Pensions Regulator has opened an investigation, but the damage may already be done. The Treasury is reportedly considering a clampdown on such advice, but insiders say the real failure is that the government has no effective policy to reverse the trend.
The human cost is already visible. Housing benefit claims among over-60s have risen 12% in the last year, a figure expected to accelerate as the first Gen Z cohort enters retirement in four decades. A former pensions minister, who spoke on condition of anonymity, told me: ‘We have created a two-tier system where the wealthy can buy property and ride the market, while everyone else watches the state pension shrink. The explosion will come when those without assets hit 68.’
For now, the Treasury continues to spin the narrative of ‘responsible saving’, but the unredacted lines in the leaked briefing tell a different story. One graph, marked ‘worst case’, projects one in five under-30s reaching retirement age with no assets and no private income. That is not a forecast. That is a countdown. And the clock is ticking.
Corporations have already begun to notice. Several major investment firms have lobbied the Treasury to guarantee pension fund returns, a move that analysts warn would effectively socialise risk while privatising profit. The Chancellor is said to be ‘sympathetic’ to these demands, but that line is not playing well inside the department. One junior minister is reported to have called the idea ‘insane’. We will see who blinks first.
