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Government data released this week reveals that nearly half of working-age adults are not contributing to a private or workplace pension.
Those less likely to have pension provisions include the self-employed, low-income earners, and women, while only a quarter of individuals with Pakistani or Bangladeshi heritage possess such a plan, according to the BBC.
The BBC interviewed several individuals without workplace or private pensions to understand the factors behind this trend.
“I am more worried about surviving day-to-day than worrying about the future,” says 29-year-old Mohaimen, reflecting a common sentiment.
Originally from Bangladesh and residing in London, Mohaimen works in the hospitality sector on a contingent basis.
He was automatically enrolled in a pension scheme during his university retail job but opted out upon realizing the funds were inaccessible until retirement.
“The whole dream of having a good job and paying into a pension doesn’t feel like it applies to me,” he states. “A lot of my financial decisions are survival based – that’s my reality.”
He added, “Even if I do get a good job with good pension benefits, I’d rather save for a deposit for a house. I’ll try to get £30k – £50k in my bank account. I think that’s more important than anything else.”
Saira Amir, 46, a self-employed stylist in Norfolk, expresses a desire to save for a pension but struggles to cover daily living expenses.
She supports three children, ages 21, 20, and 11, who live at home with her.
“Being self-employed in this job is risky,” she notes. She aspires to open her own salon, but cites prohibitive costs.
The single mother receives Universal Credit, a benefit payment for working-age individuals.
However, she says it covers groceries and £5 a day bus fares to get to clients and “isn’t enough” to save for a pension too.
Saira also notes that, unlike previous generations of her Pakistani family who relied on their children for retirement support, she is uncertain of her children’s intentions, “I don’t know their mindset” so she isn’t expecting the same.
Individuals lacking private or workplace pensions may depend on the state pension.
Generally, 35 years of qualifying National Insurance contributions are needed to receive the full state pension.
This currently stands at £230.25 per week, equating to £11,973 per year in the 2025/26 tax year.
However, the Pensions and Lifetime Savings Association estimates that a minimum retirement living standard requires £13,400 annually for a single person and £21,600 for a couple.
A “moderate” lifestyle necessitates £31,700 per year for a single person and £43,900 for two people.
A “comfortable” retirement requires an annual income of £43,900 for one person and £60,600 for two.
All employers are legally required to offer a workplace pension scheme to their staff and automatically enroll eligible employees.
Eligibility includes earning at least £10,000 per year per job and being aged between 22 and state pension age. This excludes those aged under 22 and the self-employed.
Workers can opt-out if they choose not to save. Otherwise, 5% of earnings above £6,240 annually, plus a 3% employer contribution, are automatically deposited into a pension fund.
This measure aims to encourage early retirement savings to supplement the state pension. Since its phased introduction in 2012, it has been largely considered a success, with relatively few individuals opting out.
Workplace pension contributions also benefit from tax relief.
“So, if you are a basic rate taxpayer who would have paid 20% income tax it means you get 20% tax relief on your pension contribution,” explains Helen Morrisey, head of retirement analysis at Hargreaves Lansdown.
“This means that a £100 pension contribution would only cost you £80.”
She adds: “For a higher rate taxpayer who would have paid tax at 40% that £100 contribution would only cost them £60.”
Victoria Olsena, 38, remarks that she “barely knows anyone” who actively saves for retirement.
“People should realize that the future is going to be terrible and they should do something about it,” she urges.
Originally from Argentina and a British citizen after several years in the UK, Victoria owns her own AI marketing consultancy earning £50,000 a year.
She contributes to both a pension and an ISA, expressing regret for not starting pension contributions sooner.
Helen at Hargreaves Lansdown advises: “Retirement may feel like a long way away and that can mean you prioritise other things for your money.”
“But it is exactly this long-term drip feed of contributions going into your pension over time that really builds up its value.
“Getting to grips with it early will really help you as it can be hard to make up lost ground later on.”
Additional reporting by Connie Bowker and Kevin Peachey.
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