Despite cost-of-living strain, savers protect pensions and call for stronger State Pension

• 44% of people say their financial situation is worse than 12 months ago, yet only 4% have reduced pension contributions. 

• 65% agree people should be encouraged to make higher contributions. 

• Only 18% believe the full State Pension of around £12,000 a year is enough to live on, while 62% disagree. 

• Keeping the State Pension rising with inflation (58%) and ensuring it is enough to live on (56%) are by far people’s top priorities for reform. 

UK households are feeling increasing pressure, with 44% saying their financial situation is worse than it was 12 months ago, up from 34% in 2024. Many are cutting back on everyday spending, including eating out (39%), takeaways (35%), holidays (32%) and even savings contributions (31%). Yet pension contributions remain largely untouched, with only 4% reducing workplace or private pension payments.

What savers want from reform

The survey also shows strong appetite for reforms that make pensions easier to manage and deliver better outcomes. 65% agree people should be encouraged to make higher contributions, 87% expect the Government to ensure pensions deliver good value for money, 61% want all pensions automatically combined, and 77% want to see all their pensions in one place. 79% agree people should be able to easily choose how their pension is invested.

Many of these priorities align with measures in the Pension Schemes Bill, including tackling small pots, introducing a value for money framework, and supporting guided retirement products.

Workplace saving essential to supplement State Pension

Emphasising the vital role of private pension saving, confidence in the adequacy of the State Pension remains low with 62% of respondents stating the full State Pension of around £12,000 per year is not enough to live on in retirement.

There is overwhelming support for maintaining its value, with 89% agreeing that the State Pension should always rise with the cost of living. When asked which pension-related issues the Government should prioritise, keeping the State Pension rising with inflation (58%) and ensuring it is enough to live on (56%) were the top concerns. Other priorities included keeping pension tax rules simple and stable (28%) or improving financial education for younger people (26%).

These findings come as the Government’s Pension Schemes Bill is making its passage through Parliament, highlighting public expectations for reforms that secure a fairer and more adequate foundation for retirement income.

Zoe Alexander, Executive Director of Policy and Advocacy at Pensions UK, said: “Households are under pressure, but what really stands out is that people are continuing to save through automatic enrolment, and indeed 65% of people believe contributions should go up. This demonstrates both the value people place on retirement security and the power of automatic enrolment. It puts the onus on politicians and industry, and the current Pensions Commission, to make sure the system works well for as many savers as possible. Pensions UK will be supporting the Commission through its own research on automatic enrolment system design.

“Encouragingly, many of the reforms in the Pension Schemes Bill, such as action on small pots, guided retirement products and a new value for money regime, reflect what the public want and what Pensions UK has long called for.

“Our research shows that people want Government to focus on protecting the value of pensions and helping them grow steadily over time. Decisions about how pensions invest should always be based on what is best for savers, not short-term policy aims, otherwise people could face unnecessary risks. The best way to deliver strong outcomes is for schemes to make investment decisions in the long-term interests of members.”

The research was conducted on behalf of Pensions UK by Yonder Consulting in September 2025 with an overall sample size of 2,082.

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]