Why could a third of under-60s retire below the minimum living standard, and what does the Fabian Society pensions crisis study mean for Britain

The pensions crisis facing younger Britons was put into figures on 25 September, when research by the Fabian Society found that 31 per cent of people aged 22 to 60 could retire below the minimum retirement living standard of £13,900 a year for a single person. For Generation Z, those born between 1997 and 2012, the figure rises to 35 per cent. The study was sponsored by Age UK, the Trades Union Congress and the Dartmouth Street Trust, and first reported by The i Paper. It combined a Survation poll of 4,000 UK adults with focus groups and the think-tank's own financial modelling, The WP Times reports.

The findings come just over four weeks before Chancellor John Healey's first Budget on Wednesday 28 October, when the Treasury is expected to consider pension taxation. The minimum standard set by Pensions UK excludes housing costs, yet it is already above the full new state pension. According to the Department for Work and Pensions, that pension rose by 4.8 per cent in April to £241.30 a week, or about £12,547 a year. In the same poll, 55 per cent want the triple lock replaced, 64 per cent want planned rises in the state pension age slowed or stopped, and 72 per cent back cutting higher-rate tax relief on pension contributions. No response from the Department for Work and Pensions or the Treasury had been published at the time of writing.

What did the Fabian Society find about the pensions crisis

The Fabian Society asked respondents to use a pensions calculator to estimate their retirement income from their savings to date and their retirement plans, applying industry-standard assumptions. On that basis, 31 per cent of today's 22- to 60-year-olds would fall below the minimum retirement living standard, and 35 per cent of Generation Z. The think-tank links the gap to barriers to entering the labour market, slow wage growth, student debt and the long shift from defined benefit to defined contribution pensions. The public mood matches the projections: nearly 48 per cent of under-45s expect to be worse off in retirement than today's pensioners. The research was shared exclusively with The i Paper and published on 25 September 2026.

How much money do you need to retire in the UK

Pensions UK, formerly the Pensions and Lifetime Savings Association, sets three Retirement Living Standards each year, based on what the public considers necessary for a minimum, moderate and comfortable retirement. The 2026 figures, published on 3 June, put the minimum at £13,900 a year for a single person and £22,500 for a couple. All three levels exclude rent and mortgage costs, which Pensions UK says vary too much by region and personal circumstance to include. At the full new state pension of about £12,547, a single person with no other income would be around £1,350 a year short of the minimum. Two full state pensions, about £25,094, would clear the minimum for a couple, but not everyone qualifies for the full amount. In June, Pensions UK projected that about 82 per cent of working people would reach the minimum, 23 per cent the moderate standard and 9 per cent the comfortable standard.

The Pensions UK and Fabian Society estimates differ because they use different data and methods. Pensions UK projects outcomes for working people as a whole, while the Fabian Society modelled each respondent's own savings and plans. Both put a significant share of the working-age population below the minimum.

Why is Generation Z most exposed?

Generation Z entered work after most private-sector final salary schemes had closed, so their retirement income depends on defined contribution pots. Those pots are shaped by earnings, contribution rates and investment returns, not a guaranteed income. The Fabian Society points to slow wage growth and student debt as limits on how much younger workers can save. It also cites harder access to stable work in the early years, when contributions have longest to grow. Automatic enrolment starts only at age 22 and above annual earnings of £10,000. The Minister for Pensions, Torsten Bell, confirmed in a written statement to Parliament on 18 December 2025 that the thresholds would stay unchanged for 2026-27. The Pensions Commission's interim report, published by the Department for Work and Pensions on 19 May 2026, found that three-quarters of employees contribute less than 12 per cent of earnings. It put pension participation among the self-employed at around 4 per cent.

Should the triple lock be replaced

The triple lock raises the state pension each April by the highest of earnings growth, inflation or 2.5 per cent. It was introduced by George Osborne as chancellor in 2011. The April 2026 rise of 4.8 per cent followed average weekly earnings growth for May to July 2025, according to the House of Commons Library. Office for Budget Responsibility forecasts cited by The i Paper put the cost of the policy at £15.5bn a year by 2030, three times the original estimate. In the Fabian Society polling, 55 per cent said the government should replace it with a different mechanism, but the answer splits sharply by age. Generation Z and millennials favour replacement by two to one, while baby boomers and the silent generation, born between 1928 and 1945, favour keeping it by the same margin. The government has not announced any change to the triple lock.

What is happening to the state pension age

Under current law, the state pension age is rising from 66 to 67 between 2026 and 2028, and is due to rise to 68 between 2044 and 2046. The government launched the third State Pension age review in July 2025, with Dr Suzy Morrissey leading its independent report and the Government Actuary's Department providing life expectancy analysis. GOV.UK does not yet give a date for the review's findings. The Fabian Society polling found little appetite for speeding up the timetable: 64 per cent would prefer planned increases to slow or stop entirely, and 14 per cent think the age should rise faster. The TUC said concern was greatest among those on the lowest incomes, for whom the state pension makes up a larger share of retirement income.

What could the Budget mean for pension tax relief

The Budget on Wednesday 28 October will be the first delivered by John Healey as chancellor, and pension tax is among the areas the Treasury is expected to examine. Under current rules, most people can take up to 25 per cent of each pension tax-free, within a lifetime Lump Sum Allowance of £268,275, according to government-backed MoneyHelper guidance. Contributions attract relief at the saver's marginal rate, so higher and additional rate taxpayers receive more relief per pound saved. The Fabian Society found limited support for broad change: 44 per cent back reducing pension income tax relief, and 19 per cent think pensions should be taxed like other income. Support rises sharply for targeting high earners, with 72 per cent backing cuts to higher-rate relief on contributions.

Could auto-enrolment be expanded?

Automatic enrolment has brought workplace pension participation to about 90 per cent of eligible employees, according to the Pensions Commission. Gaps remain for the lowest paid and the self-employed. The Fabian Society poll found 79 per cent support for extending auto-enrolment to low-income workers below the current trigger, and 77 per cent for bringing in the self-employed. Seven in ten said the government should ensure every pensioner can afford the basics for an acceptable quality of life. The Pensions Commission was revived by the Department for Work and Pensions in July 2025 to review private pension adequacy. In its interim report, Pensions 2050, it identified around 15 million working-age people at risk of missing retirement income targets, rising to 19 million in some scenarios. Its call for evidence closed on 14 July 2026, and its final report is due in spring 2027.

What have campaigners and pension bodies said?

The Fabian Society said its research showed a "narrow but credible route to consensus" on reform (Fabian Society, research shared with The i Paper, 25 September 2026). It argued that changes must protect those who need it and build public confidence in those protections. On the state pension age, Paul Nowak said: "Almost two-thirds want increases to slow or stop" (Paul Nowak, general secretary, Trades Union Congress, 25 September 2026). He described the Pensions Commission as a chance for the government to hear workers' concerns. Pensions UK had warned in June that "today's saving levels will not be enough for the retirement they expect" (Zoe Alexander, executive director of policy, Pensions UK, 3 June 2026).

What can savers check now?

• State pension forecast: the GOV.UK Check your State Pension forecast service shows the amount, the date it can be claimed and any gaps in National Insurance record.
• Missing National Insurance years: voluntary contributions can fill gaps and raise the state pension amount.
• Workplace contributions: anyone earning over £10,000 with one employer, aged 22 or over and under state pension age, should be enrolled automatically.
• Lost pension pots: the government's Pension Tracing Service helps find schemes from previous jobs.
• Free guidance: MoneyHelper and Pension Wise, for those aged 50 and over, offer free, government-backed guidance on pension options.

What happens next for pensions policy

The coming months set out a fixed timetable. The Budget on 28 October will show whether the Treasury changes pension tax relief or the tax-free lump sum. The April 2027 state pension increase will again follow the triple lock unless the law is changed. The Pensions Commission's final report in spring 2027 is expected to set out options on contribution levels, auto-enrolment coverage and adequacy benchmarks. The third State Pension age review has not yet published its findings.

Frequently asked questions about the pensions crisis

What is the pensions crisis in the UK?

The pensions crisis refers to the growing number of working-age people on course to retire without enough income for a basic standard of living. Research by the Fabian Society, published on 25 September 2026, found that 31 per cent of people aged 22 to 60 could fall below the minimum retirement living standard. The Pensions Commission's interim report put around 15 million working-age people at risk of missing retirement income targets.

What is the minimum retirement living standard for 2026?

The minimum retirement living standard set by Pensions UK is £13,900 a year for a single person and £22,500 for a couple. The figures, published on 3 June 2026, exclude housing costs.

How much is the full new state pension in 2026-27?

The full new state pension is £241.30 a week, or about £12,547 a year, for the 2026-27 tax year. It rose by 4.8 per cent in April 2026 in line with average earnings growth under the triple lock.

Is the state pension enough to live on in retirement?

For a single person with no other income, the full new state pension is about £1,350 a year below the minimum retirement living standard of £13,900, before housing costs. For a couple, two full state pensions of about £25,094 would clear the £22,500 minimum.

Why is Generation Z facing a pensions crisis?

The Fabian Society found that 35 per cent of Generation Z, those born between 1997 and 2012, could retire below the minimum standard. It linked this to barriers to entering the labour market, slow wage growth, student debt and the shift from defined benefit to defined contribution pensions.

What is the state pension triple lock?

The triple lock raises the state pension each April by the highest of earnings growth, inflation or 2.5 per cent. It was introduced in 2011, and the Fabian Society polling found 55 per cent of adults want it replaced with a different mechanism.

Is the triple lock being scrapped?

No. The government has not announced any change to the triple lock, and the next state pension increase under it is due in April 2027.

When will the state pension age rise to 67 and 68?

The state pension age is rising from 66 to 67 between 2026 and 2028, and is due to rise to 68 between 2044 and 2046. A third State Pension age review was launched in July 2025, and its findings have not yet been published.

Will pension tax relief change in the Budget?

The Autumn Budget will be delivered by Chancellor John Healey on Wednesday 28 October 2026. Pension taxation is expected to be considered, but no changes have been announced. The Fabian Society found 72 per cent support for cutting higher-rate tax relief on pension contributions.

How much of my pension can I take tax-free?

Most people can take up to 25 per cent of each pension tax-free, within a total Lump Sum Allowance of £268,275 across all their pensions.

Who is automatically enrolled into a workplace pension?

Employees aged 22 or over and under state pension age who earn more than £10,000 a year with one employer must be automatically enrolled. The thresholds were kept unchanged for 2026-27, as confirmed in a written statement to Parliament on 18 December 2025.

Can self-employed people get auto-enrolment?

No. Automatic enrolment currently applies only to employees. The Pensions Commission found pension participation among the self-employed at around 4 per cent, and 77 per cent of people in the Fabian Society poll back extending auto-enrolment to them.

When will the Pensions Commission publish its final report?

The Pensions Commission, revived in July 2025, published its interim report, Pensions 2050, on 19 May 2026. Its final report is due in spring 2027.

How can I check my state pension forecast?

You can use the Check your State Pension forecast service on GOV.UK. It shows how much you could get, when you can claim it and whether there are gaps in your National Insurance record.

Sources used: Fabian Society research via The i Paper (25 September 2026), Department for Work and Pensions (GOV.UK) Pensions 2050 interim report, GOV.UK third State Pension age review, UK Parliament written statement HCWS1206 on automatic enrolment thresholds, House of Commons Library benefits uprating 2026/27 and State Pension age briefings, MoneyHelper, Pensions UK Retirement Living Standards 2026, Professional Pensions, Trades Union Congress, Survation, Office for Budget Responsibility.

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