Money Wellness

cost of living

Published 07 May 2025

4 min read

Rising living costs leave many facing retirement without enough to get by – study finds

A new report from Scottish Widows highlights worrying concerns about how well people are preparing for retirement, especially as the cost of living continues to rise.

Gabrielle Pickard-Whitehead - Money Wellness

Written by: Gabrielle Pickard Whitehead

Lead financial content writer

Published: 7 May 2025

It is based on a YouGov survey of nearly 5,100 people across the UK in March and April 2024.

Many at risk of financial struggle in retirement

  • Nearly 40% of people may not have enough to cover even basic needs when they retire because pension savings are not keeping pace with rising living costs.
  • This is worse than in 2023, when 35% felt the same, meaning about 1.2m more people are now at risk.
  • Only 22% of people believe they’ll have enough for a basic lifestyle in retirement, with a little left for extras.

Delayed retirement becoming the norm

  • Most people want to retire at 62, but over half (54%) think they’ll have to work about seven years longer than that.
  • Around 27% don’t think they’ll ever be able to retire.
  • Even among those who’ve made retirement plans, more than a quarter still don’t believe they can afford to stop working.

Heavy dependence on the state pension

  • 54% of people expect the state pension to be a big part of their income in retirement.
  • 75% say it’s vital for covering everyday living costs.
  • But 12% are unsure if it will still be available by the time they retire.

Some groups are worse off

Certain groups are less likely to be on track for even a basic standard of retirement:

  • Part-time workers: 41% are not on track, compared to 25% of full-time workers.
  • Self-employed people: 38% are not on track.
  • Many in these groups earn less or don’t qualify for automatic pension enrolment.

Other groups likely not to be on track for a minimum lifestyle in retirement are:

  • women
  • people aged 30–49
  • renters
  • LGBTQ+ people, black communities and people with disabilities

    Where you live makes a difference

    • Wales and the North East are the worst-affected areas, with 56% and 49% not on track for a basic retirement.
    • London shows the biggest divide: many people are either very well prepared or very far behind. High and uneven incomes, along with expensive housing, are key factors.

    Why people struggle to save for retirement

    Many people don’t feel confident about managing their retirement savings. The top reasons include:

    • 60% say the cost of living means they don’t have enough money to save
    • 38% know they don’t save enough
    • 29% aren’t sure how much they should be saving
    • 27% don’t understand how pensions work
    • 21% don’t know what to do with their money

    The role of housing costs

    High rent or mortgage payments are stopping people from saving. Some expect to still be paying for housing after they retire, adding more financial pressure later in life.

    Pete Glancy, head of pensions policy at Scottish Widows, described the growing gap in retirement outcomes and people’s quality of later life, between those who are currently retired and those who will retire in the future, as ‘of great concern’.

    “…. there is still a real reliance on the state pension, and while some will be able to use their private pension pot to give them the flexibility they are looking for in terms of retirement age, it’s only starting to dawn on others that they may end up working for much longer.”

    What you can do now

    It might be worth checking what pensions you already have.

    Use the free government pension tracing service if you’re unsure.

    Are you worried about debt going into retirement?

    If you’re heading towards retirement and still dealing with debt, you’re not alone.

    We can help you find a way to manage your debts, boost your income and get your finances back on track. Whether you’re already retired or getting close, there are things you can do to improve your money situation and feel more in control.

    We can help with:

    Gabrielle Pickard-Whitehead - Money Wellness

    Written by: Gabrielle Pickard Whitehead

    Lead financial content writer

    Gabrielle is an experienced journalist, who has been writing about personal finance and the economy for over 17 years. She specialises in social and economic equality, welfare and government policy, with a strong focus on helping readers stay informed about the most important issues affecting financial security.

    Published: 7 May 2025

    The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.

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    Gabrielle Pickard-Whitehead - Money Wellness

    Written by: Gabrielle Pickard Whitehead

    Lead financial content writer

    Published: 7 May 2025

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