Britain is sleepwalking into a pension disaster as Britons face living on £13,900 a year in retirement, shocking new research has found.
A study by the Fabian Society has revealed that almost one in three people aged between 22 and 60 risk entering retirement unable to cover even basic living costs.
The centre-left think tank, which is affiliated with the Labour Party, found that 31 per cent of working-age adults could end up below what is considered a minimum acceptable standard of living in retirement, based on their current savings trajectories.
Those belonging to Generation Z, born between 1997 and 2012, face the bleakest outlook, with 35 per cent projected to fall short of this threshold.
The research, backed by Age UK, the TUC and the Dartmouth Street Trust, drew on a representative Survation poll of 4,000 UK adults, focus group discussions and the think tank’s own financial modelling.
Close to half of today’s under-45s believe their retirement will leave them worse off than current pensioners. The minimum retirement living standard, set each year by Pensions UK, currently sits at £13,900 annually for an individual and £22,500 for a couple, with housing costs excluded.
That benchmark exceeds the full new state pension, which stands at £241.30 per week, equivalent to £12,547 a year, for the 2026-27 tax year, leaving a significant shortfall for those without private savings.
Participants in the study were asked to estimate their projected retirement income using a pensions calculator, with industry-standard assumptions applied.
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The Fabian Society attributed the savings gap to difficulties entering the job market, sluggish pay growth, the burden of student debt, and the widespread replacement of more generous defined benefit pension schemes with DC alternatives.
On the the triple lock, the mechanism that raises the state pension annually by whichever is highest among earnings growth, inflation or 2.5 per cent, a majority of 55 per cent told pollsters the Government should scrap it in favour of an alternative approach.
Gen Z and millennial respondents backed replacing the policy by a margin of two to one, while baby boomers and the silent generation, those born between 1928 and 1945, supported retaining it by the same ratio.
The Office for Budget Responsibility (OBR) has projected that by 2030 the policy will carry an annual price tag of £15.5billion, triple the original estimate when it was first implemented.
With the state pension age scheduled to reach 67 by 2028 and 68 between 2044 and 2046, the public showed little enthusiasm for bringing those increases forward.
Some 64 per cent of respondents said they would prefer the planned rises to be slowed down or halted altogether, while just 14 per cent favoured a faster timetable.
TUC general secretary Paul Nowak said: “We ignore the effects of a rising state pension age. Almost two-thirds want increases to slow or stop, with those on the lowest incomes the most worried about the impact of further hikes.”
He described the Pensions Commission as “a vital opportunity for the Government to listen to workers about their concerns for the future”.
The Fabian Society concluded that a “narrow but credible route to consensus” on reform exists, provided changes safeguard the most vulnerable and foster public confidence in those protections.
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